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What changed in Optimum Communications, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Optimum Communications, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+400 added−399 removedSource: 10-K (2024-02-15) vs 10-K (2023-02-23)

Top changes in Optimum Communications, Inc.'s 2023 10-K

400 paragraphs added · 399 removed · 320 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

108 edited+24 added−19 removed133 unchanged
Biggest changeCheddar News broadcasts live throughout the day across traditional linear television delivery systems and OTT platforms. i24NEWS Launched in July 2013, i24NEWS is an international news channel specializing in delivering international news focusing on the Middle East. i24NEWS' global news team covers top stories as they happen on three channels, in three languages: English, French and Arabic. a4 Advertising a4 is an award-winning multi-screen advertising sales agency and media consultancy business for SMBs, national brands, political candidates, and the media and entertainment industries. a4 works with advertisers to target households across the United States, using their proprietary technology and privacy-compliant database of aggregated consumer and TV viewership data.
Biggest changeWe sold this business in December 2023. i24NEWS Launched in July 2013, i24NEWS is an international news channel specializing in delivering international news focusing on the Middle East. i24NEWS' global news team covers top stories as they happen on three channels, in three languages: English, French and Arabic. a4 Advertising a4 advertising is an advanced advertising and data company that provides audience-based, multiscreen advertising solutions to local, regional and national businesses and advertising clients. a4 enables advertisers to reach millions of households on television through cable networks, on-demand and addressable inventory across the United States and through their proprietary technology and privacy-compliant database of aggregated consumer and TV viewership data. 5 New York Interconnect In many markets, we have entered into agreements commonly referred to as "Interconnects" with other cable operators to jointly sell local advertising.
The prices we charge for our services vary based on the number of services and associated service level or tier our customers choose, coupled with any promotions we may offer. Residential Services The following table shows our residential customer relationships for broadband, video and telephony services provided to residential customers.
The prices we charge for our services vary based on the number of services and associated service level or tier our customers choose, coupled with any promotions we may offer. Residential Services The following table shows our customer relationships for broadband, video and telephony services provided to residential customers.
Information Technology Our IT systems consist of billing, customer relationship management, business and operational support and sales force management systems. We continue to update and simplify our IT infrastructure through further investments, focusing on cost efficiencies, improved system reliability, functionality and scalability and enhancing the ability of our IT infrastructure to meet our ongoing business objectives.
Information Technology Our information technology ("IT") systems consist of billing, customer relationship management, business and operational support and sales force management systems. We continue to update and simplify our IT infrastructure through further investments, focusing on cost efficiencies, improved system reliability, functionality and scalability and enhancing the ability of our IT infrastructure to meet our ongoing business objectives.
Our full infrastructure MVNO agreement with T-Mobile is differentiated from other light MVNOs in that it gives us full access control over our own core network, as well as the Home Location Register and subscriber identification module ("SIM") cards. This allows us to fully control seamless data offloading and the handover between the fixed and wireless networks.
Our full infrastructure MVNO agreement with T-Mobile is differentiated from other light MVNOs in that it gives us full access control over our own core network, as well as the Home Location Register and subscriber identification module (SIM)/eSIM cards. This allows us to fully control seamless data offloading and the handover between the fixed and wireless networks.
These services are integrated into our overall IT ecosystems to ensure an efficient operation. Backup services are provided through alternate systems and infrastructure. Suppliers Customer Premise and Network Equipment We purchase set-top boxes and other customer premise equipment from a limited number of vendors because our cable systems use one or two proprietary technology architectures.
These services are integrated into our overall IT ecosystems to ensure an efficient operation. Backup services are provided through alternate systems and infrastructure. 8 Suppliers Customer Premise and Network Equipment We purchase set-top boxes and other customer premise equipment from a limited number of vendors because our cable systems use one or two proprietary technology architectures.
Proposals to streamline cable franchising recently have been adopted at both the federal and state levels. For more information, see "Regulation—Cable Television—Franchising." 6 Programming We design our channel line-ups for each system according to demographics, programming contract requirements, market research, viewership, local programming preferences, channel capacity, competition, price sensitivity and local regulation.
Proposals to streamline cable franchising recently have been adopted at both the federal and state levels. For more information, see "Regulation—Cable Television—Franchising." Programming We design our channel line-ups for each system according to demographics, programming contract requirements, market research, viewership, local programming preferences, channel capacity, competition, price sensitivity and local regulation.
Communications with our customers are also subject to FCC, FTC and state regulations on telemarketing and the sending of unsolicited commercial e-mail and fax messages, as well as additional privacy and data security requirements. State Regulation. Our CLEC subsidiaries' telecommunications services are subject to regulation by state commissions in each state where we provide services.
Communications with our customers are also subject to FCC, FTC and state regulations on telemarketing and the sending of unsolicited commercial e-mail and fax messages, as well as additional privacy and data security requirements. 17 State Regulation. Our CLEC subsidiaries' telecommunications services are subject to regulation by state commissions in each state where we provide services.
Our footprint also has several large 7 college markets where we market specialized products and services for students who live in multiple dwelling units ("MDUs"), such as dormitories and apartments. Beyond serving consumers, we have separate dedicated sales, marketing and service team for our SMB, mid-market, and enterprise customers.
Our footprint also has several large college markets where we market specialized products and services for students who live in multiple dwelling units ("MDUs"), such as dormitories and apartments. Beyond serving consumers, we have separate dedicated sales, marketing and service team for our SMB, mid-market, and enterprise customers.
We pay fees for rented circuits based on the amount of capacity available to it and pay for Internet connectivity based on the amount of IP-based traffic received from and sent over the other carrier's network. Mobile Voice and Data Equipment We purchase for resale mobile handsets from a number of original equipment manufacturers including Apple, Samsung, Motorola and TCL.
We pay fees for rented circuits based on the amount of capacity available to it and pay for Internet connectivity based on the amount of IP-based traffic received from and sent over the other carrier's network. Mobile Voice and Data Equipment We purchase for resale mobile handsets from a number of original equipment manufacturers including Apple, Samsung and Motorola.
Although the terms of franchise agreements differ from jurisdiction to jurisdiction, they typically require payment of franchise fees and contain regulatory provisions addressing, among other things, use of the right of way, service quality, cable service to schools and other public institutions, insurance, indemnity and sales of assets or changes in ownership.
Although the terms of franchise agreements differ from jurisdiction to jurisdiction, they typically require payment of franchise fees and contain regulatory provisions 11 addressing, among other things, use of the right of way, service quality, cable service to schools and other public institutions, insurance, indemnity and sales of assets or changes in ownership.
(b) For additional information regarding Adjusted EBITDA, including a reconciliation of Net Income to Adjusted EBITDA, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations." 2 Our Products and Services We provide broadband, video and telephony services to both residential and business customers.
(b) For additional information regarding Adjusted EBITDA, including a reconciliation of Net Income to Adjusted EBITDA, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations." 2 Our Products and Services We provide broadband, video, telephony and mobile services to both residential and business customers.
Verizon has constructed a FTTH network that passes a significant number of households in our New York metropolitan service area; and AT&T has constructed an FTTP/Fiber to the Node ("FTTN") infrastructure in various markets in our south-central United States service area.
Verizon has constructed a FTTH network that passes a significant number of households in our New York metropolitan service area; and AT&T has constructed an FTTP/Fiber to the Node infrastructure in various markets in our south-central United States service area.
FCC rules also allow a competing distributor to bring a complaint against a cable-affiliated terrestrially-delivered programmer or its affiliated cable operator for alleged violations of this rule, and seek reformed terms of carriage as a remedy. Program Carriage.
FCC rules also allow a competing distributor to bring a complaint against a 13 cable-affiliated terrestrially-delivered programmer or its affiliated cable operator for alleged violations of this rule, and seek reformed terms of carriage as a remedy. Program Carriage.
Our mobile wireless service is subject to most of the same FCC and consumer protection regulations as typical, network- 17 based wireless carriers (such as E911 services, local number portability, privacy protection, and constraints on billing and advertising practices).
Our mobile wireless service is subject to most of the same FCC and consumer protection regulations as typical, network-based wireless carriers (such as E911 services, local number portability, privacy protection, and constraints on billing and advertising practices).
("Lumen") and Verizon, as well as with a variety of other national and regional business services competitors. In recent years, local fiber providers and fixed wireless broadband providers have become more competitive in the business telecommunications services market.
("Lumen") and Verizon, as well as with 10 a variety of other national and regional business services competitors. In recent years, local fiber providers and fixed wireless broadband providers have become more competitive in the business telecommunications services market.
Lightpath also provides managed services to businesses, including hosted telephony services (cloud based SIP-based private branch exchange), managed WiFi, managed desktop and server backup and managed collaboration services including audio and web conferencing.
Lightpath also provides managed services to 4 businesses, including hosted telephony services (cloud based SIP-based private branch exchange), managed WiFi, managed desktop and server backup and managed collaboration services including audio and web conferencing.
Franchises As of December 31, 2022, our systems operated in more than 1,400 communities pursuant to franchises, permits and similar authorizations issued by state and local governmental authorities. Franchise agreements typically require the payment of franchise fees and contain regulatory provisions addressing, among other things, service quality, cable service to schools and other public institutions, insurance and indemnity.
Franchises As of December 31, 2023, our systems operated in more than 1,400 communities pursuant to franchises, permits and similar authorizations issued by state and local governmental authorities. Franchise agreements typically require the payment of franchise fees and contain regulatory provisions addressing, among other things, service quality, cable service to schools and other public institutions, insurance and indemnity.
These licensing fees have been the source of litigation in the past, and we cannot predict with certainty whether license fee disputes may arise in the 14 future.
These licensing fees have been the source of litigation in the past, and we cannot predict with certainty whether license fee disputes may arise in the future.
We invest heavily in target marketing, due to our regional strategy and local focus. Our strategic priority is on building new customer relationships and expanding their use of our fixed, mobile, video and voice offerings, delivering innovative solutions matched to their needs. Most of our marketing is developed centrally then customized regionally, tailoring to local audiences.
We invest heavily in target marketing, due to our regional strategy and local focus. Our strategic priority is on building new customer relationships and expanding their use of our broadband, video, voice and mobile offerings, delivering innovative solutions matched to their needs. Most of our marketing is developed centrally then customized regionally, tailoring to local audiences.
The amount of a cable operator's royalty fee payments are determined by a statutory formula that takes into account various factors, including the amount of "gross receipts" received from customers for "basic" service, the number of "distant" broadcast signals carried and the characteristics of those distant signals (e.g., network, independent or noncommercial).
The amount of a cable operator's royalty fee payments is determined by a statutory formula that takes into account various factors, including the amount of "gross receipts" received from customers for "basic" service, the number of "distant" broadcast signals carried and the characteristics of those distant signals (e.g., network, independent or noncommercial).
Other Services We may provide other services and features over our cable system, such as games and interactive advertising, that may be subject to a range of federal, state and local laws, such as privacy and consumer protection regulations. We also maintain various websites that provide information and content regarding our businesses.
Other Services We may provide other services and features over our cable system, such as games and interactive advertising, which may be subject to a range of federal, state and local laws, such as privacy and consumer protection regulations and federal and state standards and regulations. We also maintain various websites that provide information and content regarding our businesses.
As such, we have certain compliance obligations with EU and member state (and UK) laws and regulations, including compliance obligations under the GDPR and UK GDPR, and bear potential enforcement risks and fines if we fail to comply, even as the application of those regulations to some of our operations are unclear or are unknown.
As such, we have certain compliance obligations with EU member state, as well as UK laws and regulations, including compliance obligations under the GDPR and UK 18 GDPR, and bear potential enforcement risks and fines if we fail to comply, even as the application of those regulations to some of our operations are unclear or are unknown.
The legal framework for secondary copyright liability for Internet Service Providers ("ISPs"), including whether and to what extent an ISP may be liable for the alleged infringement of its subscribers' internet services, continues to evolve and could result in significant liability for the Company. Access for Persons with Disabilities.
The legal framework for secondary copyright liability for Internet Service Providers ("ISPs"), including whether and to what extent an ISP may be liable for the alleged infringement of its subscribers' internet services, continues to evolve and could result in significant liability for us. Access for Persons with Disabilities.
Securities and Exchange Commission ("SEC"). Website references in this report are provided as a convenience and do not constitute, and should not be viewed as, incorporation by reference of the information contained on, or available through, the websites. Therefore, such information should not be considered part of this report. 18
Securities and Exchange Commission ("SEC"). Website references in this report are provided as a convenience and do not constitute, and should not be viewed as, incorporation by reference of the information contained on, or available through, the websites. Therefore, such information should not be considered part of this report. 19
Enterprise Customers Lightpath provides Ethernet, data transport, IP-based virtual private networks, Internet access, telephony services, including session initiated protocol ("SIP") trunking and VoIP services to the business market primarily in the New York metropolitan area.
Enterprise Customers Lightpath, our fiber enterprise business, provides Ethernet, data transport, IP-based virtual private networks, Internet access, telephony services, including session initiated protocol ("SIP") trunking and VoIP services to the business market primarily in the New York metropolitan area.
While the reduction of competition among mobile wireless network-based providers likely will negatively impact the price and availability of wholesale RAN access to the Company generally, certain of the conditions imposed upon the merger parties by the U.S.
While the reduction of competition among mobile wireless network-based providers likely will negatively impact the price and availability of wholesale RAN access to us generally, certain of the conditions imposed upon the merger parties by the U.S.
Interconnected VoIP service providers are required to provide enhanced 911 emergency services to their customers; protect customer proprietary network information from unauthorized disclosure to third parties; 16 report to the FCC on service outages; comply with telemarketing regulations and other privacy and data security requirements; comply with disabilities access requirements and service discontinuance obligations; comply with call signaling requirements; and comply with CALEA standards.
Interconnected VoIP service providers are required to provide enhanced 911 emergency services to their customers; protect customer proprietary network information from unauthorized disclosure to third parties; report to the FCC on service outages; comply with telemarketing regulations and other privacy and data security requirements; (see " Privacy Regulations" below); comply with disabilities access requirements and service discontinuance obligations; comply with call signaling requirements; and comply with CALEA standards.
Lightpath also entered the Boston metropolitan area as a result of an acquisition of assets in June 2021 and entered the Miami metropolitan area in November 2022. Our Lightpath bandwidth connectivity service offers speeds up to 100 Gbps.
Lightpath also entered the Boston metropolitan area as a result of an acquisition of assets in June 2021 and entered the Miami metropolitan area in November 2022. Our Lightpath bandwidth connectivity service offers speeds up to 400 Gbps.
Item 1. Business Altice USA, Inc. ("Altice USA" or the "Company") was incorporated in Delaware on September 14, 2015. The Company is controlled by Patrick Drahi through Next Alt. S.à.r.l. ("Next Alt"), who also controls Altice Group Lux S.à.r.l., formerly Altice Europe N.V. ("Altice Europe") and its subsidiaries and other entities.
Item 1. Business Altice USA, Inc. ("Altice USA," "we" or the "Company") was incorporated in Delaware on September 14, 2015. We are controlled by Patrick Drahi through Next Alt. S.à.r.l. ("Next Alt"), who also controls Altice Group Lux S.à.r.l., formerly Altice Europe N.V. ("Altice Europe") and its subsidiaries and other entities.
Additionally, federal legislation has substantially increased the amount of subsidies to entities deploying broadband to areas deemed to be "unserved" or "underserved" in the past year, which could result in increased competition for our broadband services. We face intense competition from broadband communications companies with fiber-based networks.
Additionally, federal legislation has substantially increased the amount of subsidies to entities deploying broadband to areas deemed to be "unserved" or "underserved," which could result in increased competition for our broadband services. 9 We face intense competition from broadband communications companies with fiber-based networks.
Colorado also adopted a comprehensive privacy act in 2021, as did Utah and Connecticut in 2022, that also impose disclosure requirements, privacy protections, and the rights of consumers to opt out of certain data sharing. Those laws will also take effect in 2023.
Colorado also adopted a comprehensive privacy act in 2021, as did Utah and Connecticut in 2022, that also impose disclosure requirements, privacy protections, and the rights of consumers to opt out of certain data sharing. Those laws took effect in 2023.
We are subject to various other regulations, including those related to political broadcasting; home wiring; the blackout of certain network and syndicated programming; prohibitions on transmitting obscene programming; limitations on advertising in children's programming; and standards for emergency alerts, as well as telemarketing and general consumer protection laws and equal employment opportunity obligations.
We are subject to various other regulations, including those related to political broadcasting; home wiring; the blackout of certain network and syndicated programming; prohibitions on transmitting obscene 14 programming; limitations on advertising in children's programming; and standards for emergency alerts, as well as telemarketing and general consumer protection laws, federal and state marketing and advertising standards and regulations, and equal employment opportunity obligations.
We believe this FTTH network will be more resilient with reduced maintenance requirements, fewer service outages and lower power usage, which we expect will drive further structural cost efficiencies. 8 We have also focused on system reliability and disaster recovery as part of our national backbone and primary system strategy.
We believe our FTTH network is more resilient with reduced maintenance requirements, fewer service outages and lower power usage, which we expect will drive further structural cost efficiencies. We have also focused on system reliability and disaster recovery as part of our national backbone and primary system strategy.
Customer Experience We believe the customer experience is a cornerstone of our business. Our call center strategy is to demonstrate that we are reliable support experts, that are simple to interact with and work to the best of our ability to resolve the issue.
Customer Experience We believe the customer experience is a cornerstone of our business. Our call center strategy is to demonstrate that we are reliable support experts, that are simple to interact with and work to the best of our ability to resolve the issue in the first attempt.
The FCC and other federal agencies, as well as some states, direct subsidies to entities deploying broadband to areas deemed to be “unserved” or “underserved.” Federal legislation and state programs have substantially increased the amount of such subsidies in recent years, and eligibility criteria for the use of such subsidies do not always limit their use exclusively to areas lacking broadband access.
The FCC and other federal agencies, as well as some states, direct subsidies to entities deploying broadband to areas deemed to be "unserved" or "underserved." Federal legislation and state programs have substantially increased the amount of such subsidies in recent years, and eligibility criteria for the use of such subsidies do not always limit their use exclusively to areas lacking broadband access.
To support our mobile business, we have a nationwide mobile core network with five main interconnection points (Texas, California, Illinois, and two in New York), as well as the necessary interconnection points for our network partners T-Mobile and AT&T Inc. ("AT&T"), Appalachian Wireless and US Cellular.
To support our mobile business, we have a nationwide mobile core network with multiple interconnection points (including Texas, California, Illinois, and two in New York), as well as the necessary interconnection points for our network partners T-Mobile and AT&T Inc. ("AT&T"), Appalachian Wireless and US Cellular.
Approximately 500 of our employees were represented by unions as of such date. Approximately 92% of our employees are U.S. based. Our employees perform work in a variety of environments, including customers’ homes or businesses, in the field, and on site in retail stores, centers or offices.
Approximately 450 of our employees were represented by unions as of such date. Approximately 91% of our employees are U.S. based. Our employees perform work in a variety of environments, including customers’ homes or businesses, in the field, and on site in retail stores, centers or offices.
We have upgraded our networks, both through the deployment of our fiber to the home network and through new DOCSIS technologies, and we are delivering speeds of up to 1 Gbps in many areas of our footprint.
We have upgraded our networks, both through the deployment of our FTTH network and through new DOCSIS technologies, and we are delivering speeds of up to 1 Gbps in many areas of our footprint.
In addition, the FCC is currently considering whether to require VoIP providers to maintain backup power for certain network equipment, and California has adopted rules requiring VoIP providers to maintain twenty-four hours of network backup power in certain areas of the state facing elevated fire risks.
In addition, the FCC is currently considering whether to require VoIP providers to maintain backup power for certain network equipment, and California has adopted rules requiring VoIP providers to maintain seventy-two hours of network backup power in certain areas of the state facing elevated fire risks.
We compete for advertising revenue against, among others, local broadcast stations, national cable and broadcast networks, radio stations, print media, social network platforms (such as Facebook and Instagram), and online advertising companies (such as Google), content providers (such as Disney) and connected TV providers. Employees and Labor Relations Human Capital As of December 31, 2022, we had approximately 11,000 employees.
We compete for advertising revenue against, among others, local broadcast stations, national cable and broadcast networks, radio stations, print media, social network platforms (such as Facebook and Instagram), and online advertising companies (such as Google), content providers (such as Disney) and connected TV providers. Employees and Labor Relations Human Capital As of December 31, 2023, we had approximately 10,600 employees.
Depending on the market and level of service, customers have access to local broadcast networks and independent television stations, news, information, sports and entertainment channels, regional sports networks, international channels and premium services such as HBO, Showtime and Cinemax.
Depending on the market and level of service, customers have access to local broadcast networks and independent television stations, news, information, sports and entertainment channels, regional sports networks, international channels and premium services such as Max (formerly known as HBO), Showtime and Starz.
We principally provide broadband communications and video services in the United States and market our services primarily under the Optimum brand. We deliver broadband, video, and telephony services to approximately 4.9 million residential and business customers.
We principally provide broadband communications and video services in the United States and market our services primarily under the Optimum brand. We deliver broadband, video, telephony and mobile services to approximately 4.7 million residential and business customers across our footprint.
We also provide enterprise-grade fiber connectivity, bandwidth and managed services to enterprise customers and provide advertising time and services to advertisers. In 2022, we surpassed 2.1 million homes and businesses passed with our state-of-the-art FTTH network. In addition, we offer various news programming through traditional linear and digital platforms and a full service mobile offering to consumers across our footprint.
We also provide enterprise-grade fiber connectivity, bandwidth and managed services to enterprise customers and provide advertising time and services to advertisers. In 2023, we surpassed 2.7 million homes and businesses passed with our state-of-the-art FTTH network. In addition, we offer various news programming through traditional linear and digital platforms to consumers across our footprint.
Through these relationships we offer our customers complimentary access to additional hotspots nationwide. 3 Video Services We currently offer a variety of video services through Optimum TV, which include delivery of broadcast stations and cable networks, over the top ("OTT") services such as Netflix, YouTube and others, advanced digital video services, such as video-on-demand ("VOD"), HD channels, digital video recorder ("DVR") and pay-per-view, to our residential markets.
Video Services We currently offer a variety of video services through Optimum TV, which include delivery of broadcast stations and cable networks, over the top ("OTT") services such as Netflix, YouTube and others, advanced digital video services, such as video-on-demand ("VOD"), HD channels, digital video recorder ("DVR") and pay-per-view, to our residential markets.
Although commercial leased access activity historically has been relatively limited, increased activity in this area could further burden the channel capacity of our cable systems. 13 Pole Attachments. The Company makes extensive use of utility poles and conduits owned by other utilities to attach and install the facilities that are integral to our network and services.
Although commercial leased access activity historically has been relatively limited, increased activity in this area could further burden the channel capacity of our cable systems. Pole Attachments. We make extensive use of utility poles and conduits to attach and install the facilities that are integral to our network and services.
We expect programming costs to continue to increase due to a variety of factors including annual increases imposed by stations and programmers and additional programming being provided to customers, including HD, 4K UHD, digital and VOD programming. In particular, broadcast and sports programming costs have increased significantly over the past several years.
We expect programming costs to continue to increase due to a variety 6 of factors including annual increases imposed by stations and programmers and additional programming being provided to customers, including HD, 4K UHD, digital and VOD programming. In particular, broadcast and sports programming costs continue to increase significantly.
Our footprint extends across 21 states (primarily in the New York metropolitan area and various markets in the south-central United States) through a fiber-rich hybrid-fiber coaxial ("HFC") broadband network and a fiber-to-the-home ("FTTH") network with approximately 9.5 million total passings as of December 31, 2022.
Our footprint extends across 21 states (primarily in the New York metropolitan area and various markets in the south-central United States) through a fiber-rich hybrid-fiber coaxial ("HFC") broadband network and a fiber-to-the-home ("FTTH") network with approximately 9.6 million total passings as of December 31, 2023. Additionally, we offer news programming and advertising services.
December 31, 2022 2021 2020 (in thousands) Total residential customer relationships: 4,498.5 4,632.8 4,648.4 Broadband 4,282.9 4,386.2 4,359.2 Video 2,439.0 2,732.3 2,961.0 Telephony 1,764.1 2,005.2 2,214.0 The following table shows our revenues for broadband, video and telephony services provided to residential customers.
December 31, 2023 2022 2021 (in thousands) Total residential customer relationships: 4,363.1 4,498.5 4,632.8 Broadband 4,169.0 4,282.9 4,386.2 Video 2,172.4 2,439.0 2,732.3 Telephony 1,515.3 1,764.1 2,005.2 The following table shows our revenues for broadband, video, telephony and mobile services provided to residential customers.
The following table presents certain financial data and metrics for Altice USA: Years ended December 31, 2022 2021 2020 (in thousands, except percentage data) Customer Relationships (a) 4,879.7 5,014.7 5,024.6 Revenue $ 9,647,659 $ 10,090,849 $ 9,894,642 Adjusted EBITDA (b) $ 3,866,537 $ 4,427,251 $ 4,414,814 Adjusted EBITDA as % of Revenue 40.1 % 43.9 % 44.6 % Net income attributable to Altice USA, Inc. stockholders $ 194,563 $ 990,311 $ 436,183 (a) Customer metrics do not include mobile customers.
The following table presents certain financial data and metrics for Altice USA: Years ended December 31, 2023 2022 2021 (in thousands, except percentage data) Customer Relationships (a) 4,743.5 4,879.7 5,014.7 Revenue $ 9,237,064 $ 9,647,659 $ 10,090,849 Adjusted EBITDA (b) $ 3,608,890 $ 3,866,537 $ 4,427,251 Adjusted EBITDA as % of Revenue 39.1 % 40.1 % 43.9 % Net income attributable to Altice USA, Inc. stockholders $ 53,198 $ 194,563 $ 990,311 (a) Customer metrics do not include mobile customers.
Among other limitations, franchising authorities may regulate rates only for "basic" cable service. In 2015, the FCC adopted a rule establishing a presumption against rate regulation absent an affirmative showing by the franchising authority that there is an absence of effective competition. Based on the 2015 FCC rule, none of our video customers are currently subject to basic rate regulation.
In 2015, the FCC adopted a rule establishing a presumption against rate regulation absent an affirmative showing by the franchising authority that there is an absence of effective competition. Based on the 2015 FCC rule, none of our video customers are currently subject to basic rate regulation.
As cable operators provide interactive and other advanced services, additional privacy and data security requirements may arise through legislation, regulation or judicial decisions. For example, the Video Privacy Protection Act of 1988 has been extended to cover online interactive services through which customers can buy or rent movies.
As cable operators provide interactive and other advanced services, additional privacy and data security requirements may arise through legislation, regulation or judicial decisions. For example, the Video Privacy Protection Act of 1988 has been interpreted in some instances to cover online interactive services.
Accordingly, the Company continues to consolidate the operating results of the Lightpath business. In our footprint outside of the New York metropolitan area (our former Suddenlink footprint), for enterprise and larger commercial customers, we offer high capacity data services, including wide area networking and dedicated data access and advanced services such as wireless mesh networks.
In our footprint outside of the New York metropolitan area, for enterprise and larger commercial customers, we offer high capacity data services, including wide area networking and dedicated data access and advanced services such as wireless mesh networks.
Listening to and acting upon customer and agent feedback is a major pillar in our customer experience program and as such we review feedback as part of our on-going operations.
We proactively collect feedback from our customers on all frontline interactions, product experience and service experience. Listening to and acting upon customer and agent feedback is a major pillar in our customer experience program and as such we review feedback as part of our on-going operations.
Our ongoing FTTH network build, with planned upgrades, passing over 2.1 million homes as of December 31, 2022, will enable us to deliver multi-gig broadband speeds to meet the growing data needs of residential and business customers.
Our ongoing FTTH network build passing over 2.7 million homes as of December 31, 2023, has enabled us to deliver multi-gig broadband speeds to meet the growing data needs of residential and business customers.
AT&T, Frontier Communications Corporation ("Frontier") and Verizon Communications Inc.'s ("Verizon") Fios are our primary fiber-based competitors.
AT&T, Frontier Communications Corporation ("Frontier") and Verizon Communications Inc.'s ("Verizon") Fios are our primary fiber-based competitors. T-Mobile fixed wireless, Verizon fixed wireless and AT&T Internet Air are our primary wireless broadband competitors.
In addition, contracts to purchase sports programming sometimes provide for optional additional programming to be available on a surcharge basis during the term of the contract.
In addition, contracts to purchase sports programming sometimes provide for optional additional programming to be available on a surcharge basis during the term of the contract. We have programming contracts that have expired and others that will expire in the near term.
It is possible that Congress or the FCC will expand or modify its regulations of cable systems in the future, and we cannot predict at this time how that might impact our business. Broadband Regulatory Classification.
The FCC can aggressively enforce compliance with its regulations and consumer protection policies, including through the imposition of substantial monetary sanctions. It is possible that Congress or the FCC will expand or modify its regulations of cable systems in the future, and we cannot predict at this time how that might impact our business. Broadband Regulatory Classification.
Depending on the outcome of the FCC’s 2022 quadrennial review of media ownership rules, the broadcast industry could consolidate further, which could impact the fees we pay broadcasters to license their signals. Set-Top Boxes.
This change may help reduce the leverage broadcasters can exercise in negotiating the fees we pay them to license their signals. Depending on the outcome of the FCC’s 2022 quadrennial review of media ownership rules, the broadcast industry could consolidate further, which could adversely impact those fees. Set-Top Boxes.
In this vacuum, some states have asserted more expansive rights to regulate interconnected VoIP services, while others have adopted laws that bar the state commission from regulating VoIP service. Universal Service.
The FCC has not, however, formally classified interconnected VoIP services as either information services or telecommunications services. In this vacuum, some states have asserted more expansive rights to regulate interconnected VoIP services, while others have adopted laws that bar the state commission from regulating VoIP service.
Optional telephony add-on services include international calling and toll free numbers. News and Advertising News 12 Our News 12 networks consist of seven 24-hour local news channels in the New York metropolitan area—the Bronx, Brooklyn, Connecticut, Hudson Valley, Long Island, New Jersey and Westchester—providing each with complete access to hyper-local breaking news, traffic, weather, sports, and more.
News and Advertising News 12 Our News 12 networks consist of seven 24-hour local news channels in the New York metropolitan area—the Bronx, Brooklyn, Connecticut, Hudson Valley, Long Island, New Jersey and Westchester—providing each with complete access to hyper-local breaking news, traffic, weather, sports, and more. News 12 also includes a streaming OTT regional news channel, News 12 New York.
We have programming contracts that have expired and others that will expire in the near term. We will seek to renegotiate the terms of these agreements, but there can be no assurance that these agreements will be renewed on favorable or comparable terms.
We will seek to renegotiate the terms of these agreements, but there can be no assurance that these agreements will be renewed on favorable or comparable terms.
Congress and some states are considering legislation that may codify “net neutrality” rules, which could include prohibitions on blocking, throttling and prioritizing Internet traffic. A number of states, including California and New York, have adopted legislation and/or executive orders that apply “net neutrality” rules to ISPs. The California legislation took effect in March 2021.
The FCC is expected to act on this proposal by mid-2024. Net Neutrality. Congress and some states are considering legislation that may codify "net neutrality" rules, which could include prohibitions on blocking, throttling and prioritizing Internet traffic. A number of states, including California and New York, have adopted legislation and/or executive orders that apply "net neutrality" rules to ISPs.
Our approach is informed by best practices in recruitment, retention, community 11 engagement and culture building, which will help us build a company that is welcoming, respectful and with equal opportunities for all.
Diversity and Inclusion We are committed to diversity and inclusion with a focus on providing our employees and our customers with the best experience possible. Our approach is informed by best practices in recruitment, retention, community engagement and culture building, which will help us build a company that is welcoming, respectful and with equal opportunities for all.
Alternatively, local commercial broadcast television stations may elect "retransmission consent," giving up their must-carry right and instead negotiating with cable systems the terms on which the cable systems may carry the station's programming content. Cable systems generally may not carry a broadcast station that has elected retransmission consent without the station's consent.
Cable operators are required to carry, without compensation, programming transmitted by most local commercial and noncommercial broadcast television stations that elect "must carry" status. Alternatively, local commercial broadcast television stations may elect "retransmission consent," giving up their must-carry right and instead negotiating with cable systems the terms on which the cable systems may carry the station's programming content.
The FCC has adopted several regulations for interconnected VoIP services, as have several states, especially as it relates to core customer and safety issues such as E911, local number portability, disability access, outage reporting, universal service contributions, and regulatory reporting requirements. The FCC has not, however, formally classified interconnected VoIP services as either information services or telecommunications services.
Telephony Services We provide telephony services using VoIP technology ("interconnected VoIP") and traditional switched telephony via our CLEC subsidiaries. The FCC has adopted several regulations for interconnected VoIP services, as have several states, especially as it relates to core customer and safety issues such as E911, local number portability, disability access, outage reporting, universal service contributions, and regulatory reporting requirements.
We expect further scrutiny of privacy practices at all levels of government in the areas where we operate, and implementing systems to comply with new rules could impact our business opportunities and impose operating costs on the business. Our i24NEWS operation has employees and offices in the European Union ("EU") that are subject to the General Data Protection Regulation ("GDPR").
We expect further scrutiny of privacy practices at all levels of government in the areas where we operate. Implementing and updating systems and processes to comply with new rules could impact our business opportunities and impose operating costs on the business.
Supreme Court, but the FCC has the statutory obligation to review its broadcast ownership rules every four years and revise them if it determines that the public interest so requires.
In 2017, the FCC relaxed some broadcast media ownership rules, and the broadcast industry subsequently experienced consolidation. The FCC's order was subsequently affirmed by the U.S. Supreme Court, but the FCC has the statutory obligation to review its broadcast ownership rules every four years and revise them if it determines that the public interest so requires.
The Communications Act requires most utilities to provide cable systems with access to poles and conduits to attach such facilities at regulated rates.
The Communications Act requires most utilities to provide cable systems with access to poles and conduits to attach such facilities at regulated rates, but does not extend these requirements to other entities, such as municipalities and electric cooperatives.
The FCC has prohibited cable operators from entering into or enforcing exclusive agreements with owners of multitenant buildings under which the operator is the only multichannel video programming distributor ("MVPD") with access to the building. The FCC is currently considering whether to adopt additional rules regarding access to multitenant environments by providers of broadband service. CALM Act.
The FCC prohibits cable operators from entering into or enforcing exclusive agreements with owners of multitenant buildings under which the operator is the only multichannel video programming distributor ("MVPD") with access to the building.
Additionally, we provide app based solutions for TV, including a companion mobile app that allows viewing of television content on iOS or Android devices, as well as the available Optimum TV app on Apple TV for eligible customers.
Additionally, we provide app based solutions for TV, including a companion mobile app that allows viewing of television content on iOS or Android devices, as well as the available Optimum TV app on Apple TV, and on Optimum Stream for eligible customers. 3 Our residential customers pay a monthly charge based on the video programming level of service, tier or package they receive and the type of equipment they select.
A key component to reclaim bandwidth was the digital delivery of video channels that were previously distributed in analog through the launch of digital simulcast, which duplicates analog channels as digital channels.
In addition, we continue to expand and refine our bandwidth utilization in order to meet demand for new and improved advanced services. A key component to reclaim bandwidth was the digital delivery of video channels that were previously distributed in analog through the launch of digital simulcast, which duplicates analog channels as digital channels.
Our VOD service provides on-demand access to movies, special events, free prime time content and general interest titles. Subscription-based VOD premium content such as HBO and Showtime is made available to customers who subscribe to one of our premium programming packages. For a monthly fee, we offer DVR services.
Subscription-based VOD premium content such as Max and Starz is made available to customers who subscribe to one of our premium programming packages. For a monthly fee, we offer DVR services.
As a result, the precise extent to which state rules may impose such requirements, as well as other regulatory obligations, on broadband Internet access service providers is not fully settled. Additionally, the FCC is expected to revisit the appropriate regulatory classification of broadband in 2023. Net Neutrality.
As a result, the precise extent to which state rules may impose such requirements, as well as other regulatory obligations, on broadband Internet access service providers is not fully settled. The FCC, in 2023, proposed reclassifying broadband service as a common carrier telecommunications service under similar terms and conditions as the 2015 Order.
Years Ended December 31, 2022 2021 2020 Residential revenue: (in thousands) Broadband $ 3,930,667 $ 3,925,089 $ 3,689,159 Video 3,281,306 3,526,205 3,670,859 Telephony 332,406 404,813 468,777 Broadband Services We offer a variety of broadband service tiers tailored to meet the different needs of our residential customers. Current offers include download speeds up to 5 Gbps for our residential customers.
Years Ended December 31, 2023 2022 2021 Residential revenue: (in thousands) Broadband $ 3,824,472 $ 3,930,667 $ 3,925,089 Video 3,072,011 3,281,306 3,526,205 Telephony 300,198 332,406 404,813 Mobile 77,012 61,832 51,281 Broadband Services We offer a variety of broadband service tiers tailored to meet the different needs of our residential customers.
The terms of retransmission consent agreements frequently include the payment of compensation to the station. Broadcast stations must elect either "must carry" or retransmission consent every three years. A substantial number of local broadcast stations currently carried by our cable systems have elected to negotiate for retransmission consent.
Cable systems generally may not carry a broadcast station that has elected 12 retransmission consent without the station's consent. The terms of retransmission consent agreements frequently include the payment of compensation to the station. Broadcast stations must elect either "must carry" or retransmission consent every three years.
We deliver our signals via laser-fed fiber optic cable from control centers known as headends and hubs to individual nodes. Each node is connected to the individual homes served by us.
Network Management Our cable systems are generally designed with an HFC architecture that has proven to be highly flexible in meeting the increasing needs of our customers. We deliver our signals via laser-fed fiber optic cable from control centers known as headends and hubs to individual nodes. Each node is connected to the individual homes served by us.
We brought a challenge in federal and state court against one such attempt to regulate our pricing by the New Jersey Board of Public Utilities, and successfully obtained a ruling in state court enjoining that agency from enforcing its regulation. The agency appealed that ruling to the New Jersey Supreme Court and a ruling from the Supreme Court is pending.
We brought a challenge in federal and state court against one such attempt to regulate our pricing by the New Jersey Board of Public Utilities ("Board"), but in 2023, the New Jersey Supreme Court upheld the Board's regulation. Must-Carry/Retransmission Consent.
To ensure the highest quality support, we have call routing to specialized agents based on certain call types. We continue to work on simplifying and improving our agent toolset to better serve our customer needs.
To ensure the highest quality support, we have call routing to specialized agents based on certain call types.
We believe we own or have the right to use all of the intellectual property that is necessary for the operation of our business as we currently conduct it.
We also rely on our access to the proprietary technology of Altice Europe, including through Altice Labs, and licenses to the name "Altice" and derivatives from Next Alt. We believe we own or have the right to use all of the intellectual property that is necessary for the operation of our business as we currently conduct it.
The FCC requires cable operators to report network outages that exceed a specified threshold. Some jurisdictions, such as California, have begun to impose new technical requirements on facilities-based wireline providers as part of their resiliency proceedings. Other states have undertaken examinations of storm resiliency, recovery, and customer impacts, which could lead to additional regulation of the industry.
The FCC requires cable operators to report network outages that exceed a specified threshold and, in 2024, put in place regulations that mandate reporting on operational status and restoration information during disasters. Some jurisdictions, such as California, have begun to impose new technical requirements on facilities-based wireline providers as part of their resiliency proceedings.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factors Relating to Regulatory and Legislative Matters • Our business is subject to extensive governmental legislation and regulation. • Our cable system franchises are subject to non-renewal or termination. • Our cable system franchises are non-exclusive. • Local franchising authorities have the ability to impose additional regulatory constraints on our business. • Further regulation of the cable industry could restrict our marketing options or impair our ability to raise rates. • We may be materially adversely affected by regulatory changes related to pole attachments. • Changes in channel carriage regulations could impose significant additional costs on us. • Increasing regulation of our Internet-based products and services could adversely affect our ability to provide new products and services. • Offering telephone services may subject us to additional regulatory burdens, causing us to incur additional costs. • Our mobile service exposes us to regulatory risk. • We may be materially adversely affected by regulatory, legal and economic changes relating to our physical plant.
Biggest changeRisk Factors Relating to Regulatory and Legislative Matters • Our business is subject to extensive governmental legislation and regulation. • Our cable system franchises are subject to non-renewal or termination. • Our cable system franchises are non-exclusive. • Local franchising authorities have the ability to impose additional regulatory constraints on our business. • Further regulation of the cable industry could restrict our marketing options or impair our ability to raise rates. • We may be materially adversely affected by regulatory changes related to pole attachments and the regulatory environment related to pole attachments could impede our ability to expand into new markets. • Changes in channel carriage regulations could impose significant additional costs on us. • Increasing regulation of our Internet-based products and services could adversely affect our ability to provide new products and services. • Offering telephone services may subject us to additional regulatory burdens, causing us to incur additional costs. • Our mobile service exposes us to regulatory risk. • We may be materially adversely affected by regulatory, legal and economic changes relating to our physical plant. • We may be adversely affected if other parties are able to get government subsidies to overbuild our plant, or if subsidies we receive to construct facilities or support low-income subscribers run out .
Some of these vendors do not have a long operating history or may not be able to continue to supply the products services we desire. In addition, because of the pace at which technological innovations occur in our industry, we may not be able to obtain access to the latest technology on reasonable terms.
Some of these vendors do not have a long operating history or may not be able to continue to supply the products or services we desire. In addition, because of the pace at which technological innovations occur in our industry, we may not be able to obtain access to the latest technology on reasonable terms.
Our business has grown significantly as a result of acquisitions, which entail numerous risks including: • distraction of our management team in identifying potential acquisition targets, conducting due diligence and negotiating acquisition agreements; • difficulties in integrating the operations, personnel, products, technologies and systems of acquired businesses; 31 • difficulties in enhancing our customer support resources to adequately service our existing customers and the customers of acquired businesses; • the potential loss of key employees or customers of the acquired businesses; • unanticipated liabilities or contingencies of acquired businesses; • unbudgeted costs which we may incur in connection with pursuing potential acquisitions which are not consummated; • failure to achieve projected cost savings or cash flow from acquired businesses, which are based on projections that are inherently uncertain; • fluctuations in our operating results caused by incurring considerable expenses to acquire and integrate businesses before receiving the anticipated revenues expected to result from the acquisitions; and • difficulties in obtaining regulatory approvals required to consummate acquisitions, or costs associated with obtaining such approvals in the form of additional expenses or ongoing conditions on the operation of the business.
Our business has grown significantly as a result of acquisitions, which entail numerous risks including: • distraction of our management team in identifying potential acquisition targets, conducting due diligence and negotiating acquisition agreements; • difficulties in integrating the operations, personnel, products, technologies and systems of acquired businesses; • difficulties in enhancing our customer support resources to adequately service our existing customers and the customers of acquired businesses; • the potential loss of key employees or customers of the acquired businesses; • unanticipated liabilities or contingencies of acquired businesses; • unbudgeted costs which we may incur in connection with pursuing potential acquisitions which are not consummated; • failure to achieve projected cost savings or cash flow from acquired businesses, which are based on projections that are inherently uncertain; • fluctuations in our operating results caused by incurring considerable expenses to acquire and integrate businesses before receiving the anticipated revenues expected to result from the acquisitions; and • difficulties in obtaining regulatory approvals required to consummate acquisitions, or costs associated with obtaining such approvals in the form of additional expenses or ongoing conditions on the operation of the business.
Labor disruptions could adversely affect our business, financial condition and results of operations. • A significant amount of our book value consists of intangible assets that may not generate cash in the event of a voluntary or involuntary sale. • We may engage in acquisitions, dispositions and other strategic transactions and the integration of such acquisitions, the sales of assets and other strategic transactions could materially adversely affect our business, financial condition and results of operations. • Significant unanticipated increases in the use of bandwidth-intensive Internet-based services could increase our costs. • Our business depends on intellectual property rights and on not infringing on others' intellectual property rights. • We may be liable for the material that content providers distribute over our networks. • If we are unable to retain key employees, our ability to manage our business could be adversely affected. 19 • Impairment of the Altice brand or Mr.
Labor disruptions could adversely affect our business, financial condition and results of operations. • A significant amount of our book value consists of intangible assets that may not generate cash in the event of a voluntary or involuntary sale. • We may engage in acquisitions, dispositions and other strategic transactions and the integration of such acquisitions, the sales of assets and other strategic transactions could materially adversely affect our business, financial condition and results of operations. • Significant unanticipated increases in the use of bandwidth-intensive Internet-based services could increase our costs. • Our business depends on intellectual property rights and on not infringing on others' intellectual property rights. • We may be liable for the material that content providers distribute over our networks. • If we are unable to retain key employees, our ability to manage our business could be adversely affected. • Impairment of the Altice brand or Mr.
Drahi, will be able to significantly influence the composition of our Board of Directors and thereby influence our policies and 40 operations, including the appointment of management, future issuances of Altice USA common stock or other securities, the payment of dividends, if any, on Altice USA common stock, the incurrence or modification of debt by us, amendments to our amended and restated certificate of incorporation and amended and restated bylaws and the entering into extraordinary transactions, and their interests may not in all cases be aligned with our stockholders' interests.
Drahi, will be able to significantly influence the composition of our Board of Directors and thereby influence our policies and operations, including the appointment of management, future issuances of Altice USA common stock or other securities, the payment of dividends, if any, on Altice USA common stock, the incurrence or modification of debt by us, amendments to our amended and restated certificate of incorporation and amended and restated bylaws and the entering into extraordinary transactions, and their interests may not in all cases be aligned with our stockholders' interests.
Prolonged labor shortages could also lead to decreased productivity and increased labor costs from higher overtime, the need to hire temporary help to meet demand and higher wages rates in order to attract and retain employees. Any of these developments could materially increase our sourcing costs and have a material adverse effect on our results of operations.
Prolonged labor shortages could also lead to decreased productivity and increased labor costs from higher overtime, the need to hire temporary help to meet demand and higher wages rates in order to attract and retain employees. Any of these developments could materially increase our costs and have a material adverse effect on our results of operations.
Any of these events, if experienced by or directed at us or technologies upon which we depend, could have adverse consequences on our network, infrastructure or facilities, as well as our customers and business, including degradation of service, service disruption, excessive call volume to call centers, and damage to our or our customers’ equipment and data.
Any of these events, if experienced by or directed at us or technologies or assets upon which we depend, could have adverse consequences on our network, infrastructure or facilities, as well as our customers and business, including degradation of service, service disruption, excessive call volume to call centers, and damage to our or our customers’ equipment and data.
Regulatory changes in this area could disrupt existing programming commitments, interfere with our preferred use of limited channel capacity and limit our ability to offer 37 services that would maximize our revenue potential. It is possible that other legal restraints will be adopted limiting our discretion over programming decisions.
Regulatory changes in this area could disrupt existing programming commitments, interfere with our preferred use of limited channel capacity and limit our ability to offer services that would maximize our revenue potential. It is possible that other legal restraints will be adopted limiting our discretion over programming decisions.
Alternatively, if a court were to find this provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition and results of operations. 42
Alternatively, if a court were to find this provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition and results of operations.
Certain states are also considering adopting energy efficiency regulations governing the operation of equipment that we use, which could constrain innovation. Congress periodically considers whether to rewrite the entire Communications Act, or to adopt more focused changes to that Act, to account for changes in the communications marketplace.
Certain states are also considering adopting energy efficiency regulations governing the operation of equipment that 35 we use, which could constrain innovation. Congress periodically considers whether to rewrite the entire Communications Act, or to adopt more focused changes to that Act, to account for changes in the communications marketplace.
While we have developed and maintain systems designed to prevent service disruptions and shutdowns, and we have developed system redundancy and disaster recovery plans designed to mitigate such network and system-related disruptions and to expeditiously recover from such events, these measures may be ineffective or inadequate and may not be sufficient for all eventualities.
While we have developed and maintain systems designed to prevent 30 service disruptions and shutdowns, and we have developed system redundancy and disaster recovery plans designed to mitigate such network and system-related disruptions and to expeditiously recover from such events, these measures may be ineffective or inadequate and may not be sufficient for all eventualities.
In addition, there are a few cities that have constructed their own cable systems, in a manner similar to city-provided utility services, and private cable companies not affiliated with established local exchange carriers have also demonstrated an interest in constructing overbuilds.
In addition, there are a few cities that have constructed their own cable systems, in a 36 manner similar to city-provided utility services, and private cable companies not affiliated with established local exchange carriers have also demonstrated an interest in constructing overbuilds.
However, because the techniques used to 30 obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures.
However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time, we may be unable to anticipate these techniques or implement adequate preventive measures.
Our mobile wireless strategy depends on the availability of wholesale RAN access from one or more network-based providers with whom we are likely to compete. Our mobile service is vulnerable to constrai nts on the availability of wholesale access or increases in price from the incumbents.
Our mobile wireless strategy depends on the availability of wholesale RAN access from one or more network-based providers with whom we are likely to compete. Our mobile service is vulnerable to constrai nts on the availability of 34 wholesale access or increases in price from the incumbents.
These and other economic factors could adversely affect demand for our products, which in turn could adversely affect our financial condition and results of operations. 33 Online piracy of entertainment and media content could result in reduced revenues and increased expenditures which could materially harm our business, financial condition and results of operations.
These and other economic factors could adversely affect demand for our products, which in turn could adversely affect our financial condition and results of operations. Online piracy of entertainment and media content could result in reduced revenues and increased expenditures which could materially harm our business, financial condition and results of operations.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
Risk Factors Relating to Ownership of Our Class A Common Stock and Class B Common Stock • An active, liquid trading market for our Class B common stock has not developed and we cannot assure you that an active, liquid trading market will develop in the future. • Our stockholders' percentage ownership in us may be diluted by future issuances of capital stock. • We have no current plans to pay cash dividends on our Class A common stock or Class B common stock for the foreseeable future. • Future sales, or the perception of future sales, by us or our existing stockholders in the public market could cause the market price of our Class A common stock to decline. • The tri-class structure of Altice USA common stock has the effect of concentrating voting control with Next Alt. • Next Alt controls us and its interests may conflict with ours or our stockholders in the future. • Anti-takeover provisions in our organizational documents could prevent a change of control transaction. • Holders of a single class of Altice USA common stock may not have any remedies if an action by our directors has an adverse effect on only that class of Altice USA common stock. • We are a "controlled company" within the meaning of the rules of the NYSE. • If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our Class A common stock, or if our operating results do not meet their expectations, the market price of our Class A common stock could decline. • We have been subject to securities class action litigation in the past and could be subject to securities class action litigation in the future. • Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders. 20 Risk Factors Relating to Our Business We operate in a highly competitive business environment which could materially adversely affect our business, financial condition, results of operations and liquidity.
Risk Factors Relating to Ownership of Our Class A Common Stock and Class B Common Stock • An active, liquid trading market for our Class B common stock has not developed and we cannot assure you that an active, liquid trading market will develop in the future. • Our stockholders' percentage ownership in us may be diluted by future issuances of capital stock. • We have no current plans to pay cash dividends on our Class A common stock or Class B common stock for the foreseeable future. • Future sales, or the perception of future sales, by us or our existing stockholders in the public market could cause the market price of our Class A common stock to decline. • The tri-class structure of Altice USA common stock has the effect of concentrating voting control with Next Alt. • Next Alt controls us and its interests may conflict with ours or our stockholders in the future. • Anti-takeover provisions in our organizational documents could prevent a change of control transaction. • Holders of a single class of Altice USA common stock may not have any remedies if an action by our directors has an adverse effect on only that class of Altice USA common stock. • We are a "controlled company" within the meaning of the rules of the New York Stock Exchange ("NYSE"). • If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our Class A common stock, or if our operating results do not meet their expectations, the market price of our Class A common stock could decline. • We have been subject to securities class action litigation in the past and could be subject to securities class action litigation in the future. • Our amended and restated bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders. 21 Risk Factors Relating to Our Business We operate in a highly competitive business environment which could materially adversely affect our business, financial condition, results of operations and liquidity.
The sale of substantial amounts of shares of our Class A common stock (including shares of Class A common stock issuable upon conversion of shares of our Class B common stock), or the perception that such sales could occur, 39 could cause the prevailing market price of shares of our Class A common stock to decline.
The sale of substantial amounts of shares of our Class A common stock (including shares of Class A common stock issuable upon conversion of shares of our Class B common stock), or the perception that such sales could occur, could cause the prevailing market price of shares of our Class A common stock to decline.
A default under any of the agreements governing our indebtedness could materially adversely affect our financial condition and results of operations. 27 As a result, we may be: • limited in how we conduct our business; • unable to raise additional debt or equity financing to operate during general economic or business downturns; or • unable to compete effectively or to take advantage of new business opportunities.
A default under any of the agreements governing our indebtedness could materially adversely affect our financial condition and results of operations. 28 As a result, we may be: • limited in how we conduct our business; • unable to raise additional debt or equity financing to operate during general economic or business downturns; or • unable to compete effectively or to take advantage of new business opportunities.
Our 26 credit rating (including the credit rating assigned to our subsidiaries’ debt securities and credit facilities) has in the past been and may continue to be impacted by a number of factors, including the effects of the U.S. economy experiencing an uneven recovery following a protracted slowdown, factors affecting the broadband communications and video service industry, our operating performance and our financing activities.
Our 27 credit rating (including the credit rating assigned to our subsidiaries’ debt securities and credit facilities) has in the past been and may continue to be impacted by a number of factors, including the effects of the U.S. economy experiencing an uneven recovery following a protracted slowdown, factors affecting the broadband communications and video service industry, our operating performance and our financing activities.
Our video services also face competition from broadcast television stations, entities that make digital video recorded movies and programs available for home rental or sale, satellite master antenna television ("SMATV") systems, which generally serve large MDUs under an agreement with the landlord and service providers and open video 21 system operators.
Our video services also face competition from broadcast television stations, entities that make digital video recorded movies and programs available for home rental or sale, satellite master antenna television ("SMATV") systems, which generally serve large MDUs under an agreement with the landlord and service providers and open video 22 system operators.
The FCC subsequently extended more modest relief to incumbent cable operators like the Company, affirming that the Communications Act bars states and localities from exercising their cable franchising authority to regulate cable operators’ non-cable services, and subjecting certain fees for access to the right-of-way and certain in-kind payments obligations to the statutory cap on franchise fees.
The FCC subsequently extended more modest relief to incumbent cable operators like us, affirming that the Communications Act bars states and localities from exercising their cable franchising authority to regulate cable operators’ non-cable services, and subjecting certain fees for access to the right-of-way and certain in-kind payments obligations to the statutory cap on franchise fees.
Regardless of the merit of these claims, they can be time-consuming, result in costly litigation and diversion of technical and management personnel, or require us to modify our business, develop a non-infringing technology, be 32 enjoined from use of certain intellectual property, use alternate technology or enter into license and royalty agreements.
Regardless of the merit of these claims, they can be time-consuming, result in costly litigation and diversion of technical and management personnel, or require us to modify our business, develop a non-infringing technology, cause us to be enjoined from use of certain intellectual property, use alternate technology or enter into license and royalty agreements.
The Company operates in all of these industries and is therefore subject to, among other things: • rules governing the provisioning and marketing of cable equipment and compatibility with new digital technologies; • rules governing the manner in which we advertise, market or price our products and services in the marketplace, and how we position those products and services against competing products and services; • rules and regulations relating to data protection and customer and employee privacy; • rules establishing limited rate regulation of video service; 34 • rules governing the copyright royalties that must be paid for retransmitting broadcast signals; • rules governing when a cable system must carry a particular broadcast station and when it must first obtain retransmission consent to carry a broadcast station; • rules governing the provision of channel capacity to unaffiliated commercial leased access programmers; • rules limiting the ability to enter into exclusive agreements with MDUs and control inside wiring; • rules for cable franchise renewals and transfers; • other requirements covering a variety of operational areas such as equal employment opportunity, emergency alert systems, disability access, technical standards and customer service and consumer protection requirements; • rules, regulations and regulatory policies relating to the provision of broadband service, including "net neutrality" requirements; • rules, regulations and regulatory policies relating to the provision of telephony services; and • rules, regulations and regulatory policies relating to licensed mobile network operators, wholesale access to mobile networks by resellers or MVNOs, and regulation of the prices, terms, or service provided by mobile operators.
We operate in all of these industries and are therefore subject to, among other things: • rules governing the provisioning and marketing of cable equipment and compatibility with new digital technologies; • rules governing the manner in which we advertise, market or price our products and services in the marketplace, and how we position those products and services against competing products and services; • rules and regulations relating to data protection and customer and employee privacy; • rules establishing limited rate regulation of video service; • rules governing the copyright royalties that must be paid for retransmitting broadcast signals; • rules governing when a cable system must carry a particular broadcast station and when it must first obtain retransmission consent to carry a broadcast station; • rules governing the provision of channel capacity to unaffiliated commercial leased access programmers; • rules limiting the ability to enter into exclusive agreements with MDUs and control inside wiring; • rules for cable franchise renewals and transfers; • other requirements covering a variety of operational areas such as equal employment opportunity, emergency alert systems, disability access, technical standards and customer service and consumer protection requirements; • rules, regulations and regulatory policies relating to the provision of broadband service, including "net neutrality" requirements; • rules, regulations and regulatory policies relating to the provision of telephony services; and • rules, regulations and regulatory policies relating to licensed mobile network operators, wholesale access to mobile networks by resellers or MVNOs, and regulation of the prices, terms, or service provided by mobile operators.
To the extent we are unable to 23 reach agreement with certain programmers on terms we believe are reasonable, we may be forced to, or determine for strategic or business reasons to, remove certain programming channels from our line-up and may decide to replace such programming channels with other programming channels, which may not be available on acceptable terms or be as attractive to customers.
To the extent we are unable to 24 reach agreement with certain programmers on terms we believe are reasonable, we may be forced to, or determine for strategic or business reasons to, remove certain programming channels from our line-up and may decide to replace such programming channels with other programming channels, which may not be available on acceptable terms or be as attractive to customers.
As a result, we qualify for, and rely on, exemptions from certain corporate governance requirements that would otherwise provide protection to stockholders of other companies. Next Alt controls a majority of the voting power of our capital stock. As a result, we are a "controlled company" within the meaning of the corporate governance standards of the NYSE.
We are a "controlled company" within the meaning of the rules of the NYSE. As a result, we qualify for, and rely on, exemptions from certain corporate governance requirements that would otherwise provide protection to stockholders of other companies. Next Alt controls a majority of the voting power of our capital stock.
Lightpath holds a franchise from New York City that expired on 35 December 20, 2008 and the renewal process is pending.
Lightpath holds a franchise from New York City that expired on December 20, 2008 and the renewal process is pending.
In recent years, federal legislative and regulatory proposals have sought to facilitate the ability of municipalities to construct and deploy broadband facilities that could compete with our cable systems, and in the past two years, state and local governments have received substantial federal broadband subsidies that can be used to construct and operate such networks.
In recent years, federal legislative and regulatory proposals have sought to facilitate the ability of municipalities to construct and deploy broadband facilities that could compete with our cable systems, and in the past three years, state and local governments have received substantial federal broadband subsidies that can be used to construct and operate such networks.
The merger was approved by the U.S. Justice Department in July 2019, the FCC in November 2019 (which conditioned its approval on fulfillment of certain commitments, including certain conditions intended to benefit the Company) and a federal court in the Southern District of New York in February 2020.
The merger was approved by the U.S. Justice Department in July 2019, the FCC in November 2019 (which conditioned its approval on fulfillment of certain commitments, including certain conditions intended to benefit us) and a federal court in the Southern District of New York in February 2020.
Our advertising business faces competition from traditional and non-traditional media outlets, such as television and radio stations, traditional print media and the Internet, including Facebook, Google and others. 22 We face significant risks as a result of rapid changes in technology, consumer expectations and behavior.
Our advertising business faces competition from traditional and non-traditional media outlets, such as television and radio stations, traditional print media and the Internet, including Facebook, Google and others. 23 We face significant risks as a result of rapid changes in technology, consumer expectations and behavior.
However, if such measures were to become necessary, there can be no assurance that we would be able 25 to sell sufficient assets or raise strategic investment capital sufficient to meet our scheduled debt maturities as they come due.
However, if such measures were to become necessary, there can be no assurance that we would be able 26 to sell sufficient assets or raise strategic investment capital sufficient to meet our scheduled debt maturities as they come due.
While the reduction of competition among mobile wireless network-based providers likely will negatively impact the price and availability of wholesale RAN access to the Company generally, certain of the conditions imposed upon the merger parties by the U.S.
While the reduction of competition among mobile wireless network-based providers likely will negatively impact the price and availability of wholesale RAN access to us generally, certain of the conditions imposed upon the merger parties by the U.S.
The Company and many other entities, including broadband services competitors and new entrants into such services, have applied for and/or received these funds. We have generally opposed such subsidies when directed to areas that we serve and have deployed broadband capable networks.
We and many other entities, including broadband services competitors and new entrants into such services, have applied for and/or received these funds. We have generally opposed such subsidies when directed to areas that we serve and have deployed broadband capable networks.
Risk Factors Relating to Our Business • We operate in a highly competitive business environment. • We face significant risks as a result of rapid changes in technology, consumer expectations and behavior. • Programming and retransmission costs are increasing and disputes with programmers and the inability to retain or obtain popular programming can adversely affect our relationship with customers. • We may not be able to successfully implement our growth strategy. • The financial markets are subject to volatility and disruptions, which may adversely affect our business. • We are highly leveraged and have substantial indebtedness and may incur additional indebtedness. • We have in past periods incurred substantial losses from operations, and we may do so in the future. • A lowering or withdrawal of the ratings assigned to our subsidiaries' debt securities and credit facilities by ratings agencies may increase our future borrowing costs and reduce our access to capital. • Our subsidiaries' ability to meet obligations under their indebtedness may be restricted by limitations on our other subsidiaries' ability to send funds. • We are subject to significant restrictive covenants under the agreements governing our indebtedness. • We will need to raise significant amounts of funding over the next several years to fund capital expenditures, repay existing obligations and meet other obligations; we may also engage in extraordinary transactions that involve the incurrence of large amounts of indebtedness. • Changes or uncertainty in respect of LIBOR discontinuation may affect our sources of funding. • We depend on third-party vendors for certain equipment, hardware, licenses and services in the conduct of our business. • Our business, financial condition and results of operations may be adversely affected by the ongoing COVID-19 pandemic. • Labor shortages and supply chain disruptions could prevent us from meeting customer demand and negatively affect our financial results. • Disruptions to our networks, infrastructure and facilities could impair our operating activities and negatively impact our reputation and financial results. • If we experience a significant cybersecurity incident or fail to detect and appropriately respond to a significant cybersecurity incident, our results of operations and reputation could suffer. • The terms of existing or new collective bargaining agreements can increase our expenses.
Risk Factors Relating to Our Business • We operate in a highly competitive business environment. • We face significant risks as a result of rapid changes in technology, consumer expectations and behavior. • Programming and retransmission costs are increasing and disputes with programmers and the inability to retain or obtain popular programming can adversely affect our relationship with customers. • We may not be able to successfully implement our growth strategy. • The financial markets are subject to volatility and disruptions, which may adversely affect our business. • We are highly leveraged and have substantial indebtedness and may incur additional indebtedness. • We have in past periods incurred substantial losses from operations, and we may do so in the future. • A lowering or withdrawal of the ratings assigned to our subsidiaries' debt securities and credit facilities by ratings agencies may increase our future borrowing costs and reduce our access to capital. • Our subsidiaries' ability to meet obligations under their indebtedness may be restricted by limitations on our other subsidiaries' ability to send funds. • We are subject to significant restrictive covenants under the agreements governing our indebtedness. • We will need to raise significant amounts of funding over the next several years to fund capital expenditures, repay existing obligations and meet other obligations; we may also engage in extraordinary transactions that involve the incurrence of large amounts of indebtedness. • Changes or uncertainty in respect of interest rate benchmarks may affect our sources of funding. • We depend on third-party vendors for certain equipment, hardware, licenses and services in the conduct of our business. • Labor shortages and supply chain disruptions could prevent us from meeting customer demand and negatively affect our financial results. • Disruptions to our networks, infrastructure and facilities could impair our operating activities and negatively impact our reputation and financial results. • If we experience a significant cybersecurity incident or fail to detect and appropriately respond to a significant cybersecurity incident, our results of operations and reputation could suffer. • The terms of existing or new collective bargaining agreements can increase our expenses.
Moreover, if one or more of the analysts who cover our company downgrades our Class A common stock, or if our operating results do not meet their expectations, the market price of our Class A common stock could decline.
Moreover, if one or more of the analysts who cover us downgrades our Class A common stock, or if our operating results do not meet their expectations, the market price of our Class A common stock could decline.
The FCC or other regulatory authorities may adopt new or different regulations for iMVNOs or mobile carriers, or impose new fees, that could adversely affect our service or the business opportunity generally. 38 We may be materially adversely affected by regulatory, legal and economic changes relating to our physical plant.
The FCC or other regulatory authorities may adopt new or different regulations for iMVNOs or mobile carriers, or impose new fees, which could adversely affect our service or the business opportunity generally. We may be materially adversely affected by regulatory, legal and economic changes relating to our physical plant.
It is possible that additional competitors will enter the market and begin providing video content over the Internet directly to customers. Increasingly, content owners, such as HBO, CBS, Disney and ESPN, are selling their programming directly to consumers over the Internet without requiring a video subscription.
It is possible that additional competitors will enter the market and begin providing video content over the Internet directly to customers. Increasingly, content owners, such as Max (formerly known as HBO), CBS, Disney and ESPN, are selling their programming directly to consumers over the Internet without requiring a video subscription.
In December 2017, the FCC adopted an order (the "2017 Order") that in large part reverses the 2015 Order and reestablishes the “information service” classification for broadband services. The 2017 Order was affirmed in part on appeal in October 2019 insofar as it classified broadband Internet access services as information services subject to lesser federal regulation.
In December 2017, the FCC adopted an order (the "2017 Order") that in large part reverses the 2015 Order and reestablishes the "information service" classification for broadband services. The 2017 Order was affirmed in part on appeal in October 2019 insofar as it classified broadband Internet access services as information services subject to lesser federal regulation.
Our Class B common stock is not listed on the New York Stock Exchange ("NYSE") or any other stock exchange and we do not currently intend to list our Class B common stock on the NYSE or any other stock exchange.
Our Class B common stock is not listed on the NYSE or any other stock exchange and we do not currently intend to list our Class B common stock on the NYSE or any other stock exchange.
Drahi's reputation could adversely affect current and future customers' perception of Altice USA. • Macroeconomic developments may adversely affect our business. • Online piracy could result in reduced revenues and increased expenditures. • Our mobile wireless service will be subject to startup risk, competition, and risks associated with the price and availability of wholesale access to RAN.
Drahi's reputation could adversely affect current and future customers' perception of Altice USA. • Macroeconomic developments may adversely affect our business. 20 • Online piracy could result in reduced revenues and increased expenditures. • Our mobile wireless service is subject to startup risk, competition, and risks associated with the price and availability of wholesale access to RAN.
W e have experienced supply chain disruptions related to third-party vendors negatively impacted by availability of qualified labor, restrictions on employees’ ability to work, facility closures, disruptions to ports and other shipping infrastructure, border closures, other travel or health-related restrictions and increased raw material costs.
W e have experienced supply chain disruptions related to third-party vendors who have been negatively impacted by availability of qualified labor, restrictions on employees’ ability to work, facility closures, disruptions to ports and other shipping infrastructure, border closures, other travel or health-related restrictions, geopolitical issues and increased raw material costs.
Our mobile wireless service will be subject to startup risk, competition, and risks associated with the price and availability of wholesale access to RAN. In 2019, we launched a mobile wireless voice and data service.
Our mobile wireless service is subject to startup risk, competition, and risks associated with the price and availability of wholesale access to RAN. In 2019, we launched a mobile wireless voice and data service.
As of February 17, 2022, Next Alt and other entities controlled by Patrick Drahi own or have the right to vote approximately 49% of our issued and outstanding Class A and Class B common stock, which represents approximately 95% of the voting power of our outstanding capital stock.
As of February 9, 2024, Next Alt and other entities controlled by Patrick Drahi own or have the right to vote approximately 49% of our issued and outstanding Class A and Class B common stock, which represents approximately 95% of the voting power of our outstanding capital stock.
Furthermore, because of the potential for high court awards that are not necessarily predictable, it is not unusual to find even arguably unmeritorious claims settled for significant amounts.
Furthermore, because of the potential for high court awards that are not necessarily predictable and the high cost of litigation, it is not unusual to find even arguably unmeritorious claims settled for significant amounts.
The terms of existing or new collective bargaining agreements can increase our expenses. Labor disruptions could adversely affect our business, financial condition and results of operations. As of December 31, 2022, approximately 500 of the Company’s employees were represented by either the Communications Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW").
The terms of existing or new collective bargaining agreements can increase our expenses. Labor disruptions could adversely affect our business, financial condition and results of operations. 31 As of December 31, 2023, approximately 450 of our employees were represented by either the Communications Workers of America ("CWA") or the International Brotherhood of Electrical Workers ("IBEW").
Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including: • the requirement that a majority of our Board of Directors consists of "independent directors" as defined under the rules of the NYSE; and • the requirement that we have a governance and nominating committee.
Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including: • the requirement that a majority of our Board of Directors consists of "independent directors" as defined under the rules of the NYSE; and • the requirement that we have a governance and nominating committee. 42 Consistent with these exemptions, we will continue not to have a majority of independent directors on our Board of Directors or a nominating and governance committee.
We believe that our approach to the mobile wireless service offering, including the construction and operation of our own “mobile core” and the ability to bundle and promote the product to our existing customer base, will give us advantages over resellers and incumbent network-based operators alike. We nevertheless face competition from well-established incumbents like AT&T, T-Mobile and Verizon.
We believe that our approach to the mobile wireless service offering, including the construction and operation of our own "mobile core" and the ability to bundle and promote the product to our existing customer base, gives us advantages over resellers and incumbent network-based operators alike. We nevertheless face competition from well-established incumbents like AT&T, T-Mobile and Verizon.
As of December 31, 2022, two of our largest franchises, namely the Town of Brookhaven, New York, comprising an aggregate of approximately 106,000 video customers, and the New York City franchise, comprising approximately 350,000 video customers were expired. We are currently lawfully operating in these franchise areas under temporary authority recognized by the State of New York.
As of December 31, 2023, two of our largest franchises, namely the Town of Brookhaven, New York, comprising an aggregate of approximately 98,000 video customers, and the New York City franchise, comprising approximately 320,000 video customers were expired. We are currently lawfully operating in these franchise areas under temporary authority recognized by the State of New York.
It is possible that in the future we may also engage in extraordinary transactions and such transactions could result in the incurrence of substantial additional indebtedness. Changes or uncertainty in respect of LIBOR discontinuation may affect our sources of funding.
It is possible that in the future we may also engage in extraordinary transactions and such transactions could result in the incurrence of substantial additional indebtedness. Changes or uncertainty in respect of interest rate benchmarks may affect our sources of funding.
Under the principles of Delaware law and the business judgment rule, holders may not be able to successfully challenge decisions that they believe have a disparate impact upon the holders of one class of our stock if our Board of Directors is disinterested and independent with respect to the action taken, is adequately informed with respect to the action taken and acts in good faith and in the honest belief that the board is acting in the best interest of all of our stockholders. 41 We are a "controlled company" within the meaning of the rules of the NYSE.
Under the principles of Delaware law and the business judgment rule, holders may not be able to successfully challenge decisions that they believe have a disparate impact upon the holders of one class of our stock if our Board of Directors is disinterested and independent with respect to the action taken, is adequately informed with respect to the action taken and acts in good faith and in the honest belief that the board is acting in the best interest of all of our stockholders.
We were the subject to securities class action litigation related to our 2017 initial public offering (“IPO Litigation”) which was settled and approved by the court in February 2022, and we may be subject to additional securities class action litigation in the future.
We were the defendant in a securities class action litigation related to our 2017 initial public offering ("IPO Litigation") which was settled and approved by the court in February 2022, and we may be subject to additional securities class action litigation in the future.
Because of the existence of a large number of patents in the networking field, the secrecy of some pending patents and the rapid rate of issuance of new patents, we believe it is not possible to determine in advance whether a product or any of its components infringes or will infringe on the patent rights of others.
Because of the existence of a large number of patents in the networking field, the secrecy of some pending patents and the rapid rate of issuance of new patents, we believe it is not always possible to determine with precision in advance whether a particular service, product or any of their components infringes or will infringe on the patent rights of others.
We have also incurred substantial indebtedness in order to offer new or upgraded services to our current and potential customers. At December 31, 2022, the carrying value of our total aggregate indebtedness, including collateralized indebtedness, finance leases, notes payable and supply chain financing was approximately $26.6 billion.
We have also incurred substantial indebtedness in order to offer new or upgraded services to our current and potential customers. At December 31, 2023, the carrying value of our total aggregate indebtedness, including finance leases, notes payable and supply chain financing was approximately $25.1 billion.
In the United States, the Alternative Reference Rates Committee 28 has proposed the Term Secured Overnight Financing Rate ("Term SOFR") as an alternative to LIBOR for use in contracts that are currently indexed to U.S. dollar LIBOR and has proposed a phased market transition plan to Term SOFR.
In the United States, the Alternative Reference Rates Committee proposed the Term Secured Overnight Financing Rate ("Term 29 SOFR") as an alternative to LIBOR for use in contracts that were indexed to U.S. dollar LIBOR and proposed a phased market transition plan to Term SOFR.
Additionally, in the fourth quarter of 2017, we entered into a multi-year strategic agreement pursuant to which we currently utilize Sprint's (and, following the merger between T-Mobile and Sprint, T-Mobile's) network to provide mobile voice and data services to our customers throughout the nation.
We are building a FTTH network, and we continue to upgrade our existing HFC network . Additionally, in the fourth quarter of 2017, we entered into a multi-year strategic agreement pursuant to which we currently utilize Sprint's (and, following the merger between T-Mobile and Sprint, T-Mobile's) network to provide mobile voice and data services to our customers throughout the nation.
As of December 31, 2022, we had a total of 271.8 million shares of Class A common stock outstanding and 184.3 million shares of Class B common stock outstanding.
As of December 31, 2023, we had a total of 271.8 million shares of Class A common stock outstanding and 184.2 million shares of Class B common stock outstanding.
These disruptions are impacting our supply chain for technology, construction materials, products, including our consumer premises equipment, and supplies, such as fiber optic cables, and could negatively impact our financial results and our ability to execute our growth strategy and provide products and services to our customers, should they persist.
These and similar disruptions have and may in the future impact our supply chain for technology, construction materials, products, including our consumer premises equipment, and supplies, such as fiber optic cables, and could negatively impact our financial results and our ability to execute our growth strategy and provide products and services to our customers, should they persist.
The FCC has ruled that competitive telephone companies that support VoIP services, such as those that we offer to our customers, are entitled to interconnect with incumbent providers of traditional telecommunications services, which ensures that our VoIP services can operate in the market.
We offer telephone services over our broadband network and continue to develop and deploy interconnected VoIP services. The FCC has ruled that competitive telephone companies that support VoIP services, such as those that we offer to our customers, are entitled to interconnect with incumbent providers of traditional telecommunications services, which ensures that our VoIP services can operate in the market.
If our acquisitions do not result in the anticipated operating efficiencies, are not effectively integrated, or result in costs which exceed our expectations, or if our dispositions fail to generate adequate consideration, result in contingent liabilities, adversely affect our ability to generate revenue or are disruptive to our other businesses, our business, financial condition and results of operations could be materially adversely affected.
If our acquisitions do not result in the anticipated operating efficiencies, are not effectively integrated, or result in costs which exceed our expectations, or if our dispositions fail to generate adequate consideration, result in contingent liabilities, adversely affect our ability to generate revenue or are disruptive to our other businesses, our business, financial condition and results of operations could be materially adversely affected. 32 Significant unanticipated increases in the use of bandwidth-intensive Internet-based services could increase our costs.
Significant unanticipated increases in the use of bandwidth-intensive Internet-based services could increase our costs. The rising popularity of bandwidth-intensive Internet-based services poses risks for our broadband and wireless services. Examples of such services include peer-to-peer file sharing services, gaming services and the delivery of video via streaming technology and by download.
The rising popularity of bandwidth-intensive Internet-based services poses risks for our broadband and wireless services. Examples of such services include peer-to-peer file sharing services, gaming services and the delivery of video via streaming technology and by download.
As such, we could be exposed to legal claims relating to content disseminated on our networks and/or asserting that we are not eligible for statutory limitations on liability for network operators with respect to such content. Claims could involve matters such as defamation, invasion of privacy or copyright infringement.
As such, we could be exposed to legal claims relating to content disseminated on our networks and/or asserting that we are not eligible for statutory limitations on liability for network operators with respect to such content. Claims could involve matters such as defamation, invasion of privacy or copyright infringement. For example, two complaints have been filed in the U.S.
It is also possible that regulations will be adopted affecting the negotiations between MVPDs (like us) and programmers. While these regulations might provide us with additional rights and protections in our programming negotiations, they might also limit our flexibility in ways that adversely affect our operations. We may be materially adversely affected by regulatory changes related to pole attachments.
It is also possible that regulations will be adopted affecting the negotiations between MVPDs (like us) and programmers. While these 37 regulations might provide us with additional rights and protections in our programming negotiations, they might also limit our flexibility in ways that adversely affect our operations.
In addition, Next Alt may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment or improve its financial condition, even though such transactions might involve risks to our stockholders. For example, Next Alt could cause us to make acquisitions that increase our indebtedness or cause us to sell revenue-generating assets.
In addition, Next Alt may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment or improve its financial condition, even though such transactions might involve risks to our stockholders.
We depend on third-party vendors for certain equipment, hardware, licenses and services in the conduct of our business. If we do not have access to such items on reasonable terms and on a timely basis, our ability to offer our products and services could be impaired, and our business, results of operations and financial condition could be adversely affected.
If we do not have access to such items on reasonable terms and on a timely basis, our ability to offer our products and services could be impaired, and our business, results of operations and financial condition could be adversely affected.
Volatility in the capital markets may be impacted by a number of factors. Some of the main factors which contributed to capital markets volatility in recent months include, but are not limited to, inflationary pressures, the outlook for interest rates, the military conflict 24 between Russia and Ukraine and the impacts of COVID-19.
Volatility in the capital markets may be impacted by a number of factors. Some of the main factors which have recently contributed to capital markets volatility include, but are not limited to, inflationary pressures, the outlook for interest rates, the military conflicts 25 between Russia and Ukraine and in the Middle East.
Operating and maintaining our cable systems requires significant amounts of cash payments to third parties. Capital expenditures were $1,914.3 million, $1,231.7 million and $1,074.0 million in 2022, 2021 and 2020, respectively, and primarily include payments for customer premise equipment, network infrastructure, support and other costs. We are building a FTTH network, and we continue to upgrade our existing HFC network.
Operating and maintaining our cable systems requires significant amounts of cash payments to third parties. Capital expenditures were $1,704.8 million, $1,914.3 million and $1,231.7 million in 2023, 2022 and 2021, respectively, and primarily include payments for customer premise equipment, network infrastructure, support and other costs.
In addition, Next Alt is able to determine the outcome of all matters requiring stockholder approval and is able to cause or prevent a change of control of the Company or a change in the composition of our Board of Directors and could preclude any unsolicited acquisition of the Company.
For example, Next Alt could cause us to make acquisitions that increase our indebtedness or cause us to sell revenue-generating assets. 41 In addition, Next Alt is able to determine the outcome of all matters requiring stockholder approval and is able to cause or prevent a change of control of the Company or a change in the composition of our Board of Directors and could preclude any unsolicited acquisition of the Company.
It is possible that new marketing restrictions could be adopted in the future. These restrictions could affect how we provide, and limit, customer equipment used in connection with our services and how we provide access to video programming beyond conventional cable delivery.
These restrictions could affect how we provide, and limit, customer equipment used in connection with our services and how we provide access to video programming beyond conventional cable delivery.
We have brought a challenge in federal and state court against one such attempt to regulate our pricing by the New Jersey Board of Public Utilities, and successfully obtained a ruling in state court enjoining that agency from enforcing its regulation.
We brought a challenge in federal and state court against one such attempt to regulate our pricing by the New Jersey Board of Public Utilities, but that regulation was upheld by the New Jersey Supreme Court.
The Company has existing collective bargaining agreements with the CWA and IBEW that cover approximately 500 employees in New York, New Jersey and West Virginia and expire at various times between February 24, 2023 through April 25, 2024.
We have existing collective bargaining agreements with the CWA and IBEW that cover these employees in New York, New Jersey and West Virginia and expire at various times between April 2024 through December 2026.
If we need to take costly measures to reduce our exposure to these risks or are required to settle or pay damages in relation to, such claims, our business, reputation, financial condition and results of operations could be materially adversely affected. If we are unable to retain key employees, our ability to manage our business could be adversely affected.
We may incur significant costs in defending these actions, and if we need to take measures to reduce our exposure to these risks or are required to pay damages in relation to, such claims or choose to settle such claims, our business, reputation, financial condition 33 and results of operations could be materially adversely affected. See " Note 17 .
Expanding our offering of these services may require us to obtain certain authorizations, including federal and state licenses. We may not be able to obtain such authorizations in a timely manner, or conditions could be imposed upon such licenses or authorizations that may not be favorable to us.
We may not be able to obtain such authorizations in a timely manner, or conditions could be imposed upon such licenses or authorizations that may not be favorable to us.
For example, in December 2022 a complaint was filed in the U.S. District Court for the Eastern District of Texas alleging that certain of the Company's Internet subscribers infringed the plaintiffs' copyrighted works. There can be no assurance as to the outcome of such litigation.
District Court for the Eastern District of Texas alleging that certain of our Internet subscribers infringed the plaintiffs' copyrighted works. There can be no assurance as to the outcome of such litigations.
Our operational results have depended, and our future results will depend, upon the retention and continued performance of our management team. The competitive environment for management talent in the broadband communications industry could adversely impact our ability to retain and hire new key employees for management positions.
The competitive environment for management talent in the broadband communications industry could adversely impact our ability to retain and hire new key employees for management positions.
Risk Factors Relating to Ownership of Our Class A Common Stock and Class B Common Stock An active, liquid trading market for our Class B common stock has not developed and we cannot assure you that an active, liquid trading market will develop in the future.
We cannot predict how the wind-down and conclusion of the ACP will affect our broadband business, including our continued provision of a low-cost service option for low-income households. 39 Risk Factors Relating to Ownership of Our Class A Common Stock and Class B Common Stock An active, liquid trading market for our Class B common stock has not developed and we cannot assure you that an active, liquid trading market will develop in the future.
Pursuant to a stockholders and registration rights agreement between the Company and Next Alt, Altice Europe and certain former shareholders, the Altice parties thereto have the right, subject to certain conditions, to require us to register the sale of their shares of our Class A common stock, or shares of Class A common stock issuable upon conversion of shares of our Class B common stock, under the Securities Act.
Any shares held by our affiliates, as that term is defined under Rule 144 ("Rule 144") of the Securities Act of 1933, as amended (the "Securities Act"), including Next Alt and its affiliates, may be sold only in compliance with certain limitations. 40 Pursuant to a stockholders and registration rights agreement between us, Next Alt, Altice Europe and certain former shareholders, the Altice parties thereto have the right, subject to certain conditions, to require us to register the sale of their shares of our Class A common stock, or shares of Class A common stock issuable upon conversion of shares of our Class B common stock, under the Securities Act.
The FCC’s order was challenged by several municipalities and substantially upheld by the U.S. Sixth Circuit Court of Appeals on appeal, although the court curtailed the relief related to in-kind contributions.
The FCC’s order was challenged by several municipalities and substantially upheld by the U.S. Sixth Circuit Court of Appeals on appeal, although the court curtailed the relief related to in-kind contributions. Local franchising authorities have the ability to impose additional regulatory constraints on our business, which could reduce our revenues or increase our expenses.
We rely on our patents, copyrights, trademarks and trade secrets, as well as licenses and other agreements with our vendors and other parties, to use our technologies, conduct our operations and sell our products and services. Our intellectual property rights may be challenged and invalidated by third parties and may not be strong enough to provide meaningful commercial competitive advantage.
We rely on our patents, copyrights, trademarks and trade secrets, as well as licenses and other agreements with our vendors and other parties, to use our technologies, conduct our operations and sell our products and services.
Cable operators also face significant regulation affecting the carriage of broadcast and other programming channels.
Changes in channel carriage regulations could impose significant additional costs on us. Cable operators also face significant regulation affecting the carriage of broadcast and other programming channels.
Pole attachments are cable wires that are attached to utility poles. Cable system pole attachments to utility poles historically have been regulated at the federal or state level, generally resulting in favorable pole attachment rates and rights for attachments used to provide cable service.
Cable system pole attachments to utility poles operated by investor-owned utilities historically have been regulated at the federal or state level, generally resulting in favorable pole attachment rates and rights for attachments used to provide cable service. Adverse changes in the current pole attachment approach could result in a substantial increase in our pole attachment costs.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−1 removed3 unchanged
Biggest changeThe composition of the 2022 peer group was changed from the prior year to include Frontier as it emerged from bankruptcy in April 2021. The graph assumes $100 was invested on December 31, 2017 in our Class A common stock and in each of the following indices and reflects reinvestment of dividends and market capitalization weighting.
Biggest changeThe graph assumes $100 was invested on December 31, 2018 in our Class A common stock and in each of the following indices and reflects reinvestment of dividends and market capitalization weighting.
Equity Compensation Plan Information The Equity Compensation Plan information under which the Company's equity securities are authorized for issuance required under Item 5 is hereby incorporated by reference from the Company's definitive proxy statement for its Annual Meeting of Stockholders or, if such definitive proxy statement is not filed with the Securities and Exchange Commission prior to 120 days after the close of its fiscal year, an amendment to this Annual Report on Form 10-K filed under cover of Form 10-K/A.
Equity Compensation Plan Information The Equity Compensation Plan information under which the our equity securities are authorized for issuance required under Item 5 is hereby incorporated by reference from the Company's definitive proxy statement for its Annual Meeting of Stockholders or, if such definitive proxy statement is not filed with the Securities and Exchange Commission prior to 120 days after the close of its fiscal year, an amendment to this Annual Report on Form 10-K filed under cover of Form 10-K/A.
Additionally, the market capitalizations of many of the companies included in the Peer Group are quite different from ours. The common stocks of the following companies have been included in the 2022 Peer Group Index: AT&T, Charter, Comcast, DISH, Frontier, Lumen, T-Mobile, and Verizon.
Additionally, the market capitalizations of many of the companies included in the Peer Group are quite different from ours. The common stocks of the following companies have been included in the Peer Group Index: AT&T, Charter, Comcast, DISH, Frontier, Lumen, T-Mobile, and Verizon.
The Company's indentures restrict the amount of dividends and distributions in respect of any equity interest that can be made.
Our indentures restrict the amount of dividends and distributions in respect of any equity interest that can be made.
Because no published index of comparable media companies currently reports values on a dividends-reinvested basis, the Company has created a Peer Group Index for purposes of this graph in accordance with the requirements of the SEC.
Because no published index of comparable media companies currently reports values on a dividends-reinvested basis, we have created a Peer Group Index for purposes of this graph in accordance with the requirements of the SEC.
Unregistered Sales of Equity Securities and Use of Proceeds (c) Purchases of Equity Securities by the Issuer We had no transactions under the Company's share repurchase program for the quarter ended December 31, 2022.
Unregistered Sales of Equity Securities and Use of Proceeds (c) Purchases of Equity Securities by the Issuer We had no transactions under our share repurchase program for the quarter ended December 31, 2023.
See Note 1 to our consolidated financial statements for a discussion of our share repurchase program. 44 Altice USA Stock Performance Graph The graph below compares the performance of our Class A common stock with the performance of the S&P 500 Index and a Peer Group Index by measuring the changes in our Class A common stock prices from December 31, 2017 through December 31, 2022.
See Note 1 to our consolidated financial statements for a discussion of our share repurchase program which expired in November 2023. 46 Altice USA Stock Performance Graph The graph below compares the performance of our Class A common stock with the performance of the S&P 500 Index and a Peer Group Index by measuring the changes in our Class A common stock prices from December 31, 2018 through December 31, 2023.
As of February 17, 2023, there were five holders of record of Altice USA Class A common stock and two holders of record of ATUS Class B common stock. Stockholder Dividends and Distributions The Company may pay dividends on its capital stock only from net profits and surplus as determined under Delaware law.
As of February 9, 2024, there were four holders of record of Altice USA Class A common stock and two holders of record of ATUS Class B common stock. Stockholder Dividends and Distributions We may pay dividends on our capital stock only from net profits and surplus as determined under Delaware law.
Removed
Dec 31, 2017 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 ALTICE USA CLASS A $ 100.00 $ 86.74 $ 143.55 $ 198.84 $ 84.96 $ 24.15 S&P 500 Index $ 100.00 $ 93.76 $ 120.84 $ 140.49 $ 178.27 $ 169.45 2022 Peer Group Index $ 100.00 $ 90.71 $ 120.40 $ 125.01 $ 118.46 $ 100.72 2021 Peer Group Index $ 100.00 $ 90.71 $ 120.40 $ 125.01 $ 118.46 $ 98.97 45
Added
Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2023 ALTICE USA CLASS A $ 100.00 $ 165.50 $ 229.24 $ 97.94 $ 27.85 $ 19.67 S&P 500 Index $ 100.00 $ 128.88 $ 149.83 $ 190.13 $ 153.16 $ 190.27 Peer Group Index $ 100.00 $ 132.73 $ 138.17 $ 129.65 $ 111.77 $ 123.03 47

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

103 edited+43 added−36 removed34 unchanged
Biggest changeThis revision did not impact amounts reported in prior periods. 49 Results of Operations Altice USA Years Ended December 31, Favorable (Unfavorable) 2022 2021 Revenue: Residential: Broadband $ 3,930,667 $ 3,925,089 $ 5,578 Video 3,281,306 3,526,205 (244,899) Telephony 332,406 404,813 (72,407) Business services and wholesale 1,473,837 1,586,044 (112,207) News and advertising 520,293 550,667 (30,374) Mobile 97,679 84,194 13,485 Other 11,471 13,837 (2,366) Total revenue 9,647,659 10,090,849 (443,190) Operating expenses: Programming and other direct costs 3,205,638 3,382,129 176,491 Other operating expenses 2,735,469 2,379,765 (355,704) Restructuring expense and other operating items 130,285 17,176 (113,109) Depreciation and amortization (including impairments) 1,773,673 1,787,152 13,479 Operating income 1,802,594 2,524,627 (722,033) Other income (expense): Interest expense, net (1,331,636) (1,266,591) (65,045) Loss on investments, net (659,792) (88,898) (570,894) Gain on derivative contracts, net 425,815 85,911 339,904 Gain on interest rate swap contracts 271,788 92,735 179,053 Loss on extinguishment of debt and write-off of deferred financing costs (575) (51,712) 51,137 Other income, net 8,535 9,835 (1,300) Income before income taxes 516,729 1,305,907 (789,178) Income tax expense (295,840) (294,975) (865) Net income 220,889 1,010,932 (790,043) Net income attributable to noncontrolling interests (26,326) (20,621) (5,705) Net income attributable to Altice USA, Inc. stockholders $ 194,563 $ 990,311 $ (795,748) 50 The following is a reconciliation of net income to Adjusted EBITDA and Operating Free Cash Flow: Altice USA Years Ended December 31, 2022 2021 Net income $ 220,889 $ 1,010,932 Income tax expense 295,840 294,975 Other income, net (8,535) (9,835) Gain on interest rate swap contracts (271,788) (92,735) Gain on derivative contracts, net (425,815) (85,911) Loss on investments, net 659,792 88,898 Loss on extinguishment of debt and write-off of deferred financing costs 575 51,712 Interest expense, net 1,331,636 1,266,591 Depreciation and amortization 1,773,673 1,787,152 Restructuring expense and other operating items 130,285 17,176 Share-based compensation 159,985 98,296 Adjusted EBITDA 3,866,537 4,427,251 Capital expenditures (cash) 1,914,282 1,231,715 Operating Free Cash Flow $ 1,952,255 $ 3,195,536 The following is a reconciliation of net cash flow from operating activities to Free Cash Flow: Altice USA Years Ended December 31, 2022 2021 Net cash flows from operating activities $ 2,366,901 $ 2,854,078 Less: Capital expenditures (cash) 1,914,282 1,231,715 Free Cash Flow $ 452,619 $ 1,622,363 The following table sets forth certain customer metrics, excluding our mobile customers, for the Company (unaudited): December 31, Increase (Decrease) 2022 2021 Total passings (a) 9,463.8 9,263.3 200.5 Total customer relationships (b) 4,879.7 5,014.7 (135.0) Residential 4,498.5 4,632.8 (134.3) SMB 381.2 381.9 (0.7) Residential customers: Broadband 4,282.9 4,386.2 (103.3) Video 2,439.0 2,732.3 (293.3) Telephony 1,764.1 2,005.2 (241.1) Penetration of total passings (c) 51.6 % 54.1 % (2.5) % ARPU(d) $ 134.76 $ 137.79 $ (3.03) FTTH total passings (e) 2,158.7 1,171.0 987.8 FTTH customer relationships (f) 171.7 69.7 102.1 FTTH Residential 170.0 69.3 100.7 FTTH SMB 1.7 0.3 1.4 Penetration of FTTH total passings (g) 8.0 % 5.9 % 2.0 % 51 (a) Represents the estimated number of single residence homes, apartments and condominium units passed by our HFC and FTTH network in areas serviceable without further extending the transmission lines.
Biggest changePrior period amounts have been revised to conform with this presentation. 52 The following is a reconciliation of net income to Adjusted EBITDA and Operating Free Cash Flow: Years Ended December 31, 2023 2022 Net income $ 79,037 $ 220,889 Income tax expense 39,528 295,840 Other income, net (4,940) (8,535) Gain on interest rate swap contracts, net (32,664) (271,788) Loss (gain) on derivative contracts, net 166,489 (425,815) Loss (gain) on investments and sale of affiliate interests, net (180,237) 659,792 Loss (gain) on extinguishment of debt and write-off of deferred financing costs (4,393) 575 Interest expense, net 1,639,120 1,331,636 Depreciation and amortization 1,644,297 1,773,673 Restructuring, impairments and other operating items 214,727 130,285 Share-based compensation 47,926 159,985 Adjusted EBITDA 3,608,890 3,866,537 Capital expenditures (cash) 1,704,811 1,914,282 Operating Free Cash Flow $ 1,904,079 $ 1,952,255 The following is a reconciliation of net cash flow from operating activities to Free Cash Flow: Years Ended December 31, 2023 2022 Net cash flows from operating activities $ 1,826,398 $ 2,366,901 Less: Capital expenditures (cash) 1,704,811 1,914,282 Free Cash Flow $ 121,587 $ 452,619 The following table sets forth certain customer metrics (unaudited): December 31, Increase (Decrease) 2023 2022 Total passings (a) 9,628.7 9,463.8 164.9 Total customer relationships (b) 4,743.5 4,879.7 (136.2) Residential 4,363.1 4,498.5 (135.4) SMB 380.3 381.2 (0.9) Residential customers: Broadband 4,169.0 4,282.9 (113.9) Video 2,172.4 2,439.0 (266.6) Telephony 1,515.3 1,764.1 (248.8) Penetration of total passings (c) 49.3 % 51.6 % (2.3) % Average revenue per user ("ARPU") (d) $ 136.01 $ 135.86 $ 0.15 Total mobile lines (e) 322.2 240.3 81.9 FTTH total passings (f) 2,735.2 2,158.7 576.4 FTTH customer relationships (g) 341.4 171.7 169.7 FTTH Residential 333.8 170.0 163.8 FTTH SMB 7.6 1.7 5.9 Penetration of FTTH total passings (h) 12.5 % 8.0 % 4.5 % (a) Represents the estimated number of single residence homes, apartments and condominium units passed by our HFC and FTTH network in areas serviceable without further extending the transmission lines.
Our programming costs, which are the most significant component of our operating expenses, are impacted by increases in contractual rates, new channel launches, and by changes in the number of customers receiving certain programming services. We expect contractual rates to increase in the future.
Our programming costs, which are the most significant component of our operating expenses, are impacted by increases in contractual rates, changes in the number of customers receiving certain programming services, and new channel launches. We expect contractual rates to increase in the future.
Most of these accounts are also not entirely free, as they typically generate revenue through pay-per view or other pay services and certain equipment fees. Free status is not granted to regular customers as a promotion.
Most of these accounts are also not entirely free, as they typically generate revenue through pay-per view or other pay services and certain equipment fees. Free status is not granted to regular customers as a promotion.
These costs are impacted by increases in contractual rates, new channel launches, and by changes in the number of customers receiving certain programming services.
These costs are impacted by increases in contractual rates, changes in the number of customers receiving certain programming services, and new channel launches.
Adjusted EBITDA is a non-GAAP measure that is defined as net income (loss) excluding income taxes, non-operating income or expenses, loss on extinguishment of debt and write-off of deferred financing costs, gain (loss) on interest rate swap contracts, gain (loss) on derivative contracts, gain (loss) on investments and sale of affiliate interests, interest expense, net, depreciation and amortization (including impairments), share-based compensation, restructuring expense and other operating items (such as significant legal settlements, contractual payments for terminated employees, and impairments).
Adjusted EBITDA is a non-GAAP measure that is defined as net income (loss) excluding income taxes, non-operating income or expenses, loss on extinguishment of debt and write-off of deferred financing costs, gain (loss) on interest rate swap contracts, gain (loss) on derivative contracts, gain (loss) on investments and sale of affiliate interests, interest expense, net, depreciation and amortization (including impairments), share-based compensation, restructuring, impairments and other operating items (such as significant legal settlements and contractual payments for terminated employees).
Non-GAAP Financial Measures We define Adjusted EBITDA, which is a non-GAAP financial measure, as net income (loss) excluding income taxes, non-operating income or expenses, loss on extinguishment of debt and write-off of deferred financing costs, gain (loss) on interest rate swap contracts, gain (loss) on derivative contracts, gain (loss) on investments and sale of affiliate interests, interest expense, net, depreciation and amortization, share-based compensation, restructuring expense and other operating items (such as significant legal settlements, contractual payments for terminated employees, and impairments).
Non-GAAP Financial Measures We define Adjusted EBITDA, which is a non-GAAP financial measure, as net income (loss) excluding income taxes, non-operating income or expenses, gain (loss) on extinguishment of debt and write-off of deferred financing costs, gain (loss) on interest rate swap contracts, gain (loss) on derivative contracts, gain (loss) on investments and sale of affiliate interests, interest expense, net, depreciation and amortization, share-based compensation, restructuring, 50 impairments and other operating items (such as significant legal settlements and contractual payments for terminated employees).
See "Results of Operations" below for more information regarding the key factors impacting our revenues and operating expenses. 48 Historically, we have made substantial investments in our network and the development of new and innovative products and other service offerings for our customers as a way of differentiating ourselves from our competitors and we expect to do so in the future.
See "Results of Operations" below for more information regarding the key factors impacting our revenues and operating expenses. Historically, we have made substantial investments in our network and the development of new and innovative products and other service offerings for our customers as a way of differentiating ourselves from our competitors and we expect to do so in the future.
The portion of departmental costs related to disconnecting services and removing CPE from a customer, costs related to connecting CPE that has been previously connected to the network, and repair and maintenance are expensed as incurred. 64 Recently Issued Accounting Standards See Note 3 to the accompanying consolidated financial statements contained in "Part II. Item 8.
The portion of departmental costs related to disconnecting services and removing CPE from a customer, costs related to connecting CPE that has been previously connected to the network, and repair and maintenance are expensed as incurred. Recently Issued Accounting Standards See Note 3 to the accompanying consolidated financial statements contained in "Part II. Item 8.
During the fourth quarter of 2022, the New York State Division of Tax Appeals published a decision for Charter Communications, Inc. versus New York State whereby it concluded that each corporation in a combined reporting group would have to separately qualify as a qualified emerging technology company (“QETC”) to use the preferential QETC tax rate.
During the fourth quarter of 2022, the New York State Division of Tax Appeals published a decision for Charter Communications, Inc. versus New York State whereby it concluded that each corporation in a combined reporting group would have to separately qualify as a qualified emerging technology company ("QETC") to use the preferential QETC tax rate.
The redeployment of customer premise equipment is expensed as incurred. 54 Other operating expenses also include costs related to our call center operations that handle customer inquiries and billing and collection activities, and sales and marketing costs, which include advertising production and placement costs associated with acquiring and retaining customers.
The costs of redeployment of customer premise equipment is expensed as incurred. Other operating expenses also include costs related to our call center operations that handle customer inquiries and billing and collection activities, and sales and marketing costs, which include advertising production and placement costs associated with acquiring and retaining customers.
In addition, important factors that could cause our actual results to differ materially from those in our forward-looking statements include: • competition for broadband, video and telephony customers from existing competitors (such as broadband communications companies, direct broadcast satellite ("DBS") providers, wireless data and telephony providers, and Internet-based providers) and new fiber-based competitors entering our footprint; • changes in consumer preferences, laws and regulations or technology that may cause us to change our operational strategies; • increased difficulty negotiating programming agreements on favorable terms, if at all, resulting in increased costs to us and/or the loss of popular programming; • increasing programming costs and delivery expenses related to our products and services; • our ability to achieve anticipated customer and revenue growth, to successfully introduce new products and services and to implement our growth strategy; • our ability to complete our capital investment plans on time and on budget, including our plan to build a parallel FTTH network; • our ability to develop mobile voice and data services and our ability to attract customers to these services; • the effects of economic conditions or other factors which may negatively affect our customers’ demand for our current and future products and services; • the effects of industry conditions; • demand for digital and linear advertising products and services; • our substantial indebtedness and debt service obligations; • adverse changes in the credit market; • changes as a result of any tax reforms that may affect our business; • financial community and rating agency perceptions of our business, operations, financial condition and the industries in which we operate; • the restrictions contained in our financing agreements; • our ability to generate sufficient cash flow to meet our debt service obligations; • fluctuations in interest rates which may cause our interest expense to vary from quarter to quarter; • technical failures, equipment defects, physical or electronic break-ins to our services, computer viruses and similar problems; • cybersecurity incidents as a result of hacking, phishing, denial of service attacks, dissemination of computer viruses, ransomware and other malicious software, misappropriation of data, and other malicious attempts; 46 • disruptions to our networks, infrastructure and facilities as a result of natural disasters, power outages, accidents, maintenance failures, telecommunications failures, degradation of plant assets, terrorist attacks and similar events; • labor shortages and supply chain disruptions; • the impact from the COVID-19 pandemic; • our ability to obtain necessary hardware, software, communications equipment and services and other items from our vendors at reasonable costs; • our ability to effectively integrate acquisitions and to maximize expected operating efficiencies from our acquisitions or as a result of the transactions, if any; • significant unanticipated increases in the use of bandwidth-intensive Internet-based services; • the outcome of litigation, government investigations and other proceedings; and • other risks and uncertainties inherent in our cable and broadband communications businesses and our other businesses, including those listed under the caption "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained herein.
In addition, important factors that could cause our actual results to differ materially from those in our forward-looking statements include: • competition for broadband, video and telephony customers from existing competitors (such as broadband communications companies, DBS providers, wireless data and telephony providers, and Internet-based providers) and new fiber-based competitors entering our footprint; • changes in consumer preferences, laws and regulations or technology that may cause us to change our operational strategies; • increased difficulty negotiating programming agreements on favorable terms, if at all, resulting in increased costs to us and/or the loss of popular programming; • increasing programming costs and delivery expenses related to our products and services; • our ability to achieve anticipated customer and revenue growth, to successfully introduce new products and services and to implement our growth strategy; • our ability to complete our capital investment plans on time and on budget, including our plan to build a parallel FTTH network; • our ability to develop mobile voice and data services and our ability to attract customers to these services; • the effects of economic conditions or other factors which may negatively affect our customers’ demand for our current and future products and services; • the effects of industry conditions; • demand for digital and linear advertising products and services; • our substantial indebtedness and debt service obligations; • adverse changes in the credit market; • changes as a result of any tax reforms that may affect our business; • financial community and rating agency perceptions of our business, operations, financial condition and the industries in which we operate; • the restrictions contained in our financing agreements; • our ability to generate sufficient cash flow to meet our debt service obligations; • fluctuations in interest rates which may cause our interest expense to vary from quarter to quarter; • technical failures, equipment defects, physical or electronic break-ins to our services, computer viruses and similar problems; • cybersecurity incidents as a result of hacking, phishing, denial of service attacks, dissemination of computer viruses, ransomware and other malicious software, misappropriation of data, and other malicious attempts; 48 • disruptions to our networks, infrastructure and facilities as a result of natural disasters, power outages, accidents, maintenance failures, telecommunications failures, degradation of plant assets, terrorist attacks and similar events; • labor shortages and supply chain disruptions; • our ability to obtain necessary hardware, software, communications equipment and services and other items from our vendors at reasonable costs; • our ability to effectively integrate acquisitions and to maximize expected operating efficiencies from our acquisitions, if any; • significant unanticipated increases in the use of bandwidth-intensive Internet-based services; • the outcome of litigation, government investigations and other proceedings; and • other risks and uncertainties inherent in our cable and broadband communications businesses and our other businesses, including those listed under the caption "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained herein.
It includes the following sections: • Our Business • Key Factors Impacting Operating Results and Financial Condition • Consolidated Results of Operations • Non-GAAP Financial Measures • Reconciliation of CSC Holdings Results of Operations to Altice USA's Results of Operations • Liquidity and Capital Resources • Critical Accounting Policies and Estimates In this Item 7, we discuss the results of operations for the years ended December 31, 2022 and 2021 and comparisons of the 2022 results to the 2021 results.
It includes the following sections: • Our Business • Key Factors Impacting Operating Results and Financial Condition • Consolidated Results of Operations • Non-GAAP Financial Measures • Reconciliation of CSC Holdings Results of Operations to Altice USA's Results of Operations • Liquidity and Capital Resources • Critical Accounting Policies and Estimates In this Item 7, we discuss the results of operations for the years ended December 31, 2023 and 2022 and comparisons of the 2023 results to the 2022 results.
Accordingly, such numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them. Organization of Information Management’s Discussion and Analysis provides a narrative on the Company’s financial performance and condition that should be read in conjunction with the accompanying financial statements and accompanying notes thereto.
Accordingly, such numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them. Organization of Information Management’s Discussion and Analysis provides a narrative on our financial performance and condition that should be read in conjunction with the accompanying financial statements and accompanying notes thereto.
See Note 11 to our consolidated financial statements for further information regarding the Lightpath credit agreement. As of December 31, 2022, Lightpath was in compliance with applicable financial covenants under its credit agreement and with applicable financial covenants under each respective indenture by which its senior secured notes and senior notes were issued.
See Note 11 to our consolidated financial statements for further information regarding the Lightpath credit agreement. As of December 31, 2023, Lightpath was in compliance with applicable financial covenants under its credit agreement and with applicable financial covenants under each respective indenture by which its senior secured notes and senior notes were issued.
We believe Adjusted EBITDA provides management and investors a useful measure for period-to-period comparisons of our core business and operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to the Company’s ongoing operating results.
We believe Adjusted EBITDA provides management and investors a useful measure for period-to-period comparisons of our core business and operating results by excluding items that are not comparable across reporting periods or that do not otherwise relate to our ongoing operating results.
Sources of cash for the Restricted Group include primarily cash flow from the operations of the businesses in the Restricted Group, borrowings under its credit facility and issuance of securities in the capital markets, contributions from its parent, and, from time to time, distributions or loans from its subsidiaries.
CSC Holdings Restricted Group Sources of cash for the Restricted Group include primarily cash flow from the operations of the businesses in the Restricted Group, borrowings under its credit facility and issuance of securities in the capital markets, contributions from its parent, and, from time to time, distributions or loans from its subsidiaries.
In addition, it includes commercial establishments that have connected to our HFC and FTTH network. Broadband services were not available to approximately 30 thousand passings and telephony services were not available to approximately 500 thousand passings. (b) Represents number of households/businesses that receive at least one of the Company's fixed-line services.
In addition, it includes commercial 53 establishments that have connected to our HFC and FTTH network. Broadband services were not available to approximately 30 thousand passings and telephony services were not available to approximately 500 thousand passings. (b) Represents number of households/businesses that receive at least one of our fixed-line services.
In January 2023 we settled this debt by delivering the Comcast shares we held and the related equity derivative contracts resulting in the receipt of cash of approximately $50,500. See Note 11 to our consolidated financial statements for further information regarding our outstanding debt.
In January 2023 we settled this debt by delivering the Comcast shares we held and the related equity derivative contracts, resulting in the receipt of cash of approximately $50,500 (including dividends of $11,598). See Note 11 to our consolidated financial statements for further information regarding our outstanding debt.
In addition, Adjusted EBITDA is unaffected by our capital and tax structures and by our investment activities. We believe Adjusted EBITDA is an appropriate measure for evaluating the operating performance of the Company. Adjusted EBITDA and similar measures with similar titles are common performance measures used by investors, analysts and peers to compare performance in our industry.
In addition, Adjusted EBITDA is unaffected by our capital and tax structures and by our investment activities. We believe Adjusted EBITDA is an appropriate measure for evaluating our operating performance. Adjusted EBITDA and similar measures with similar titles are common performance measures used by investors, analysts and peers to compare performance in our industry.
In counting bulk residential customers, such as an apartment building, we count each subscribing family unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual room units at that hotel.
In counting bulk residential customers, such as an apartment building, we count each subscribing family unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual rooms at that hotel.
In counting bulk residential customers, such as an apartment building, we count each subscribing family unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual room units at that hotel.
In counting bulk residential customers, such as an apartment building, we count each subscribing family unit within the building as one customer, but do not count the master account for the entire building as a customer. We count a bulk commercial customer, such as a hotel, as one customer, and do not count individual rooms at that hotel.
Revenue is impacted by rate increases, promotional offerings, changes in the number of customers that subscribe to our services, including additional services sold to our existing customers, programming package changes by our video customers, speed tier changes by our broadband customers, and acquisitions and construction of cable systems that result in the addition of new customers.
Revenue is impacted by rate increases, changes in promotional offerings, changes in the number of customers that subscribe to our services, including additional services sold to our existing customers, programming package changes by our video customers, speed tier changes by our broadband customers, additional services sold to our existing customers, changes in programming packages for our video customer, acquisitions/dispositions, and construction of cable systems that result in the addition of new customers.
The Restricted Group's principal uses of cash include: capital spending, in particular, the capital requirements associated with the upgrade of its digital broadband, video and telephony services, including costs to build our FTTH network; debt service; distributions made to its parent to fund share repurchases; other corporate expenses and changes in working capital; and investments that it may fund from time to time.
The Restricted Group's principal uses of cash include: capital spending, in particular, the capital requirements associated with the upgrade of its digital broadband, video and telephony services, including costs to build our FTTH network; debt service; other corporate expenses and changes in working capital; and investments that it may fund from time to time.
We expect to utilize free cash flow and availability under the CSC Holdings revolving credit facility, as well as future refinancing transactions, to further extend the maturities of, or reduce the principal on, our debt obligations. The timing and terms of any refinancing transactions will be subject to, among other factors, market conditions.
We expect to utilize free cash flow and availability under the CSC Holdings Restricted Group and Lightpath revolving credit facilities, as well as future refinancing transactions, to further extend the maturities of, or reduce the principal on, our debt obligations. The timing and terms of any refinancing transactions will be subject to, among other factors, market conditions.
We also use Operating Free Cash Flow (defined as Adjusted EBITDA less cash capital expenditures), and Free Cash Flow (defined as net cash flows from operating activities less cash capital expenditures) as indicators of the Company’s financial performance.
We also use Operating Free Cash Flow (defined as Adjusted EBITDA less cash capital expenditures) and Free Cash Flow (defined as net cash flows from operating activities less cash capital expenditures) as indicators of our financial performance.
Although we currently believe amounts available under the CSC Holdings revolving credit facility will be available when, and if, needed, we can provide no assurance that access to such funds will not be impacted by adverse conditions in the financial markets or other conditions.
Although we currently believe amounts available under the CSC Holdings Restricted Group and Lightpath revolving credit facilities will be available when, and if, needed, we can provide no assurance that access to such funds will not be impacted by adverse conditions in the financial markets or other conditions.
If we are unable to do so, we will need to take other actions including deferring capital expenditures, selling assets, seeking strategic investments from third parties or reducing or eliminating stock repurchases and discretionary uses of cash. 59 Debt Outstanding The following table summarizes the carrying value of our outstanding debt, net of unamortized deferred financing costs, discounts and premiums (excluding accrued interest) as of December 31, 2022, as well as interest expense for the year ended December 31, 2022.
If we are unable to do so, we will need to take other actions including deferring capital expenditures, selling assets, seeking strategic investments from third parties or reducing or eliminating stock repurchases and discretionary uses of cash. 61 Debt Outstanding The following tables summarize the carrying value of our outstanding debt, net of unamortized deferred financing costs, discounts and premiums (excluding accrued interest) as of December 31, 2023, as well as interest expense for the year ended December 31, 2023.
We believe existing cash balances, operating cash flows and availability under the CSC Holdings revolving credit facility will provide adequate funds to support our current operating plan, make planned capital expenditures and fulfill our debt service requirements for the next twelve months.
We believe existing cash balances, operating cash flows and availability under the CSC Holdings Restricted Group and Lightpath revolving credit facilities will provide adequate funds to support our current operating plan, make planned capital expenditures and fulfill our debt service requirements for the next twelve months.
CSC Holdings Credit Facility In October 2015, a wholly-owned subsidiary of Altice USA, which merged with and into CSC Holdings on June 21, 2016, entered into a senior secured credit facility, which currently provides U.S. dollar term loans currently in an aggregate principal amount of $3,000,000 ($1,535,842 outstanding at December 31, 2022) (the "CSC Term Loan Facility", and the term loans extended under the CSC Term Loan Facility, the "CSC Term Loans") and U.S. dollar revolving loan commitments in an aggregate principal amount of $2,475,000 ($1,575,000 outstanding at December 31, 2022) (the "CSC Revolving Credit Facility" and, together with the CSC Term Loan Facility, the "CSC Credit Facilities"), which are governed by a credit facilities agreement entered into by, inter alios, CSC Holdings, certain lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent and security agent (as amended, restated, supplemented or otherwise modified from time to time, the "CSC Credit Facilities Agreement").
CSC Holdings Credit Facilities In October 2015, a wholly-owned subsidiary of Altice USA, which merged with and into CSC Holdings on June 21, 2016, entered into a senior secured credit facility, which currently provides U.S. dollar term loans currently in an aggregate principal amount of $3,000,000 ($1,520,483 outstanding at December 31, 2023) (the "Term Loan B"), and U.S. dollar revolving loan commitments in an aggregate principal amount of $2,475,000 ($825,000 outstanding at December 31, 2023) (the "CSC Revolving Credit Facility" and, together with the Term Loan B, the "CSC Credit Facilities"), which are governed by a credit facilities agreement entered into by, inter alios, CSC Holdings, certain lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent and security agent (as amended, restated, supplemented or otherwise modified from time to time, the "CSC Credit Facilities Agreement").
Our residential broadband, video, and telephony services accounted for approximately 41%, 34%, and 3%, respectively, of our consolidated revenue for the year ended December 31, 2022. We also derive revenue from the sale of a wide and growing variety of products and services to both large enterprise and SMB customers, including broadband, telephony, networking and video services.
Our residential broadband, video, telephony and mobile services accounted for approximately 41%, 33%, 3%, and 1% respectively, of our consolidated revenue for the year ended December 31, 2023. We also derive revenue from the sale of a wide and growing variety of products and services to both large enterprise and SMB customers, including broadband, telephony, networking, video and mobile services.
We may incur additional contractual payments for terminated employee related costs and facility realignment costs in the future as we continue to analyze our organizational structure. Depreciation and Amortization (including impairments) Depreciation and amortization (including impairments) for the years ended December 31, 2022 and 2021 amounted to $1,773,673 and $1,787,152, respectively.
We may incur additional contractual payments for terminated employee related costs and facility realignment costs in the future as we continue to analyze our organizational structure. Depreciation and Amortization (including impairments) Depreciation and amortization (including impairments) for the years ended December 31, 2023 and 2022 amounted to $1,644,297 and $1,773,673, respectively.
Our programming costs in 2023 will continue to be impacted by changes in programming rates, which we expect to increase, and by changes in the number of video customers. Other Operating Expenses Other operating expenses for the years ended December 31, 2022 and 2021 amounted to $2,735,469 and $2,379,765, respectively.
Our programming costs in 2024 will continue to be impacted by changes in programming rates, which we expect to increase, and by changes in the number of video customers. Other Operating Expenses Other operating expenses for the years ended December 31, 2023 and 2022 amounted to $2,646,258 and $2,735,469, respectively.
The effects of these gains are offset by losses on investment securities pledged as collateral, which are included in loss on investments, net discussed above. Gain on Interest Rate Swap Contracts Gain on interest rate swap contracts amounted to $271,788 and $92,735 for the years ended December 31, 2022 and 2021, respectively.
The effects of these gains (losses) were offset by losses (gains) on investment securities pledged as collateral, which are included in gain (loss) on investments, net discussed above. Gain on Interest Rate Swap Contracts Gain on interest rate swap contracts amounted to $32,664 and $271,788 for the years ended December 31, 2023 and 2022, respectively.
Senior Guaranteed Notes and Senior Notes See Note 11 of our consolidated financial statements for further details of the Company’s outstanding senior guaranteed notes and senior notes.
See Note 11 and Note 18 of our consolidated financial statements for further details of our outstanding senior guaranteed notes and senior notes.
Business services and wholesale revenue is derived primarily from the sale of fiber-based telecommunications services to the business market, and the sale of broadband, video and telephony services to SMB customers. Business services and wholesale revenue decreased $112,207 (7%) for the year ended December 31, 2022 compared to the year ended December 31, 2021.
Business services and wholesale revenue is derived primarily from the sale of fiber-based telecommunications services to the business market, and the sale of broadband, video, telephony, and mobile services to SMB customers. Business services and wholesale revenue decreased $7,120 for the year ended December 31, 2023 compared to the year ended December 31, 2022.
These costs change in relation to changes in such categories of revenues or rate changes. Additionally, these costs include the costs of mobile devices sold to our customers and direct costs of providing mobile services.
These costs change in relation to changes in such categories of revenues or rate changes. Additionally, these costs include the cost of media for advertising spots sold, the cost of mobile devices sold to our customers and direct costs of providing mobile services.
Our ongoing FTTH network build, with planned upgrades, will enable us to deliver multi-gig broadband speeds to FTTH customers in order to meet the growing data needs of residential and business customers. In addition, we have launched a full service mobile offering to consumers across our footprint.
Our ongoing FTTH network build has enabled us to deliver multi-gig broadband speeds to FTTH customers in order to meet the growing data needs of residential and business customers. In addition, we launched a full service mobile offering to consumers across our footprint.
For the year ended December 31, 2022, 15% of our consolidated revenue was derived from these business services.
For the year ended December 31, 2023, 16% of our consolidated revenue was derived from these business services.
In addition, we derive revenues from the sale of advertising time available on the programming carried on our cable television systems, digital advertising, branded content, affiliation fees for news programming, and data analytics, which accounted for approximately 5% of our consolidated revenue for the year ended December 31, 2022.
In addition, we derive revenue from the sale of advertising inventory available on the programming carried on our cable television systems, as well as other systems (linear revenue), digital advertising, data analytics and affiliation fees for news programming, which accounted for approximately 5% of our consolidated revenue for the year ended December 31, 2023.
Network infrastructure includes: (i) scalable infrastructure, such as headend equipment, (ii) line extensions, such as FTTH and fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering, and (iii) upgrade and rebuild, including costs to modify or replace existing fiber/coaxial cable networks, including enhancements.
Network infrastructure includes (i) scalable infrastructure, such as headend and related equipment, (ii) line extensions, such as fiber and coaxial cable, amplifiers, electronic equipment, and design and engineering costs to expand the network, and (iii) upgrade and rebuild, including costs to modify or replace existing segments of the network.
(g) Represents the number of total FTTH customer relationships divided by FTTH total passings. 52 Comparison of Results for the Year Ended December 31, 2022 to Results for the Year Ended December 31, 2021 Broadband Revenue Broadband revenue for the years ended December 31, 2022 and 2021 was $3,930,667 and $3,925,089, respectively.
(h) Represents the number of total FTTH customer relationships divided by FTTH total passings. 54 Comparison of Results for the Year Ended December 31, 2023 to Results for the Year Ended December 31, 2022 Broadband Revenue Broadband revenue for the years ended December 31, 2023 and 2022 was $3,824,472 and $3,930,667, respectively.
(b) Includes $1,575,000 principal amount and related interest related to the CSC Holdings' revolving credit facility that is due on the earlier of (i) July 13, 2027 and (ii) April 17, 2025 if, as of such date, any Term Loan B borrowings are still outstanding, unless the Term Loan B maturity date has been extended to a date falling after July 13, 2027. 60 (c) Includes $2,001,942 principal amount related to the CSC Holdings' Incremental Term Loan B-6 that is due on the earlier of (i) January 15, 2028 and (ii) April 15, 2027 if, as of such date, any Incremental Term Loan B-5 borrowings are still outstanding, unless the Incremental Term Loan B-5 maturity date has been extended to a date falling after January 15, 2028.
(b) Includes $1,906,850 principal amount related to the CSC Holdings' Incremental Term Loan B-6 that is due on the earlier of (i) January 15, 2028 and (ii) April 15, 2027 if, as of such date, any Incremental Term Loan B-5 borrowings are still outstanding, unless the Incremental Term Loan B-5 maturity date has been extended to a date falling after January 15, 2028.
The following is a reconciliation of net cash flow from operating activities to Free Cash Flow: CSC Holdings Years ended December 31, 2022 2021 Net cash flows from operating activities $ 2,366,901 $ 2,823,934 Capital expenditures (cash) 1,914,282 1,231,715 Free Cash Flow $ 452,619 $ 1,592,219 58 LIQUIDITY AND CAPITAL RESOURCES Altice USA has no operations independent of its subsidiaries.
The following is a reconciliation of net cash flow from operating activities to Free Cash Flow: CSC Holdings Years ended December 31, 2023 2022 Net cash flows from operating activities $ 1,826,398 $ 2,366,901 Capital expenditures (cash) 1,704,811 1,914,282 Free Cash Flow $ 121,587 $ 452,619 60 LIQUIDITY AND CAPITAL RESOURCES Altice USA has no operations independent of its subsidiaries.
Interest expense, net Interest expense, net was $1,331,636 and $1,266,591 for the years ended December 31, 2022 and 2021, respectively.
Interest expense, net Interest expense, net was $1,639,120 and $1,331,636 for the years ended December 31, 2023 and 2022, respectively.
Lightpath Credit Facility In November 2020, Lightpath entered into a credit agreement which provides a term loan in an aggregate principal amount of $600,000 ($588,000 outstanding at December 31, 2022) and revolving loan commitments in an aggregate principal amount of $100,000. As of December 31, 2022, there were no borrowings outstanding under the Lightpath 61 revolving credit facility.
Lightpath Credit Facility Lightpath is party to a credit agreement which provides a term loan in an aggregate principal amount of $600,000 ($582,000 outstanding at December 31, 2023) and revolving loan commitments in an aggregate principal amount of $100,000. As of December 31, 2023, there were no borrowings outstanding under the Lightpath revolving credit facility.
Our mobile and other revenue for the year ended December 31, 2022 accounted for approximately 1% of our consolidated revenue.
Our other revenue, which includes mobile equipment revenue, for the year ended December 31, 2023 accounted for approximately 1% of our consolidated revenue.
These costs vary period to period and certain of these costs, such as sales and marketing, may increase with intense competition. Additionally, other operating expenses include various other administrative costs.
These costs vary period to period and certain of these costs, such as sales and marketing, may increase with intense competition.
In October 2018, CSC Holdings entered into a $1,275,000 ($527,014 outstanding at December 31, 2022) incremental term loan facility (the “Incremental Term Loan B-3”) and in October 2019, CSC Holdings entered into a $3,000,000 ($2,917,500 outstanding at December 31, 2022) incremental term loan facility ("Incremental Term Loan B-5") under its existing credit facilities agreement.
In October 2018, CSC Holdings entered into a $1,275,000 ($521,744 outstanding at December 31, 2023) incremental term loan facility (the "Incremental Term Loan B-3"), in October 2019, CSC Holdings entered into a $3,000,000 ($2,887,500 outstanding at December 31, 2023) incremental term loan facility ("Incremental Term Loan B-5") and in December 2022, CSC Holdings entered into a $2,001,942 ($1,986,928 outstanding at December 31, 2023) incremental term loan facility (the "Incremental Term Loan B-6") under its existing credit facilities agreement.
Operating Free Cash Flow Operating free cash flow was $1,952,255 and $3,195,536 for the years ended December 31, 2022 and 2021, respectively. The decrease in operating free cash flow for 2022 as compared to 2021 is due to an increase in cash capital expenditures and a decrease in adjusted EBITDA.
Operating Free Cash Flow Operating free cash flow was $1,904,079 and $1,952,255 for the years ended December 31, 2023 and 2022, respectively. The decrease in operating free cash flow for 2023 as compared to 2022 is due to a decrease in adjusted EBITDA, partially offset by a decrease in cash capital expenditures.
Free Cash Flow Free cash flow was $452,619 and $1,622,363 for the years ended December 31, 2022 and 2021, respectively. The decrease in free cash flow in 2022 as compared to 2021 is primarily due to an increase in cash capital expenditures and a decrease in cash from operating activities.
Free Cash Flow Free cash flow was $121,587 and $452,619 for the years ended December 31, 2023 and 2022, respectively. The decrease in free cash flow in 2023 as compared to 2022 is primarily due to a decrease in cash from operating activities, partially offset by a decrease in cash capital expenditures.
Additionally, the allocation of revenue between the residential offerings is impacted by changes in the standalone selling price of each performance obligation within our promotional bundled offers. Our ability to increase the number of customers to our services is significantly related to our penetration rates.
Additionally, the allocation of revenue between the residential offerings is impacted by changes in the standalone selling price of each performance obligation within our promotional bundled offers.
Financing Activities Net cash used in financing activities amounted to $333,356 and $1,334,453 for the years ended December 31, 2022 and 2021, respectively. In 2022, the Company's financing activities consisted primarily of the repayment of long-term debt of $4,469,727, and principal payments on finance lease obligations of $134,682, partially offset by net proceeds from long-term debt of $4,276,903.
In 2022, our financing activities consisted primarily of the repayment of debt of $4,469,727, and principal payments on finance lease obligations of $134,682, partially offset by net proceeds from long-term debt of $4,276,903. CSC Holdings Operating Activities Net cash provided by operating activities amounted to $1,826,398 and $2,366,901 for the years ended December 31, 2023 and 2022, respectively.
(d) Calculated by dividing the average monthly revenue for the respective quarter (fourth quarter for annual periods) derived from the sale of broadband, video and telephony services to residential customers by the average number of total residential customers for the same period.
(d) Calculated by dividing the average monthly revenue for the respective quarter (fourth quarter for annual periods) derived from the sale of broadband, video, telephony and mobile services to residential customers by the average number of total residential customers for the same period (excluding mobile-only customer relationships). ARPU amounts for prior periods have been adjusted to include mobile service revenue.
As of December 31, 2022, CSC Holdings was in compliance with applicable financial covenants under its credit facility and with applicable financial covenants under each respective indenture by which the senior guaranteed notes and senior notes were issued.
As of December 31, 2023, Lightpath was in compliance with applicable financial covenants under each respective indenture by which the senior secured notes and senior notes were issued.
Adjusted EBITDA Adjusted EBITDA amounted to $3,866,537 and $4,427,251 for the years ended December 31, 2022 and 2021, respectively.
Adjusted EBITDA Adjusted EBITDA amounted to $3,608,890 and $3,866,537 for the years ended December 31, 2023 and 2022, respectively.
Gain on Derivative Contracts, net Gain on derivative contracts, net amounted to $425,815 and $85,911 for the years ended December 31, 2022 and 2021, respectively, and includes realized and unrealized gains due to the change in fair value of equity derivative contracts relating to the Comcast common stock owned by the Company.
Gain (Loss) on Derivative Contracts, net Gain (loss) on derivative contracts, net of $(166,489) and $425,815 for the years ended December 31, 2023 and 2022, respectively, includes realized and unrealized gains or losses due to the change in fair value of equity derivative contracts relating to the Comcast common stock owned by us through January 24, 2023.
The obligations of the financial institutions under the revolving credit facility are several and not joint and, as a result, a funding default by one or more institutions does not need to be made up by the others.
The obligations of the financial institutions under the revolving credit facilities are several and not joint and, as a result, a funding default by one or more institutions does not need to be made up by the others. See discussion below regarding the issuance of senior guaranteed notes in January 2024.
These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented.
These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Goodwill and Indefinite-Lived Assets Goodwill and indefinite-lived cable franchise rights are not amortized.
Adjusted EBITDA should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), and other measures of performance presented in accordance with GAAP. Since Adjusted EBITDA is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies.
Since Adjusted EBITDA is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies.
The decrease in depreciation and amortization of $13,479 (1%) for the year ended December 31, 2022 as compared to 2021 was due to lower amortization expense on intangible assets, partially offset by higher depreciation expense resulting from increased asset additions in 2022.
The decrease in depreciation and amortization of $129,376 (7%) for the year ended December 31, 2023 as compared to 2022 was due to lower amortization expense resulting from certain assets becoming fully amortized, partially offset by higher depreciation expense resulting from increased asset additions in 2023.
The decrease in cash provided by operating activities of $457,033 in 2022 as compared to 2021 resulted from a decrease in income from continuing operations before depreciation and amortization and other non-cash items of $558,119, partially offset by an increase of $101,086 due to changes in working capital (including an increase in interest payments of $69,659 and a decrease in tax payments of $9,627, as well as the timing of payments and collections of accounts receivable, among other items).
The decrease in cash provided by operating activities of $540,503 in 2023 as compared to 2022 resulted from a decrease in income from continuing operations before depreciation and amortization and other non-cash items of $774,554, partially offset by an increase of $234,051 due to changes in working capital (including an increase in interest payments of $334,899 and a decrease in tax payments of $53,667, as well as the timing of payments and collections of accounts receivable, among other items).
The decrease in cash provided by operating activities of $487,177 in 2022 as compared to 2021 resulted from a decrease in net income before depreciation and amortization and other non-cash items of $561,762, partially offset by an increase of $74,585 due to changes in working capital (including an increase in interest payments of $69,659 and a decrease in tax payments of $9,627), as well as the timing of payments and collections of accounts receivable, among other items.
The decrease in cash provided by operating activities of $540,503 in 2023 as compared to 2022 resulted from a decrease in net income before depreciation and amortization and other non-cash items of $773,364, partially offset by an increase of $232,861 due to changes in working capital (including an increase in interest payments of $334,899 and a decrease in tax payments of $53,667), as well as the timing of payments and collections of accounts receivable, among other items.
We deliver broadband, video, and telephony services to approximately 4.9 million residential and business customers. Our footprint extends across 21 states (primarily in the New York metropolitan area and various markets in the south-central United States) through a fiber-rich hybrid-fiber coaxial ("HFC") broadband network and a fiber-to-the-home ("FTTH") network with approximately 9.5 million total passings as of December 31, 2022.
Our footprint extends across 21 states (primarily in the New York metropolitan area and various markets in the south-central United States) through a fiber-rich HFC broadband network and a FTTH network with approximately 9.6 million total passings as of December 31, 2023. Additionally, we offer news programming and advertising services.
See reconciliation of net income (loss) to adjusted EBITDA above. 55 The decrease in adjusted EBITDA for the year ended December 31, 2022 as compared to the prior year was due to the decrease in revenue and an increase in operating expenses during 2022 (excluding depreciation and amortization, restructuring and other operating items and share-based compensation), as discussed above.
The decrease in adjusted EBITDA for the year ended December 31, 2023 as compared to the prior year was due to the decrease in revenue, partially offset by a decrease in operating expenses during 2023 (excluding depreciation and 57 amortization, restructuring, impairments and other operating items and share-based compensation), as discussed above.
The decrease was due primarily to a decline in video customers, partially offset by higher average recurring video revenue per video customer, primarily driven by certain rate increases. Telephony Revenue Telephony revenue for the years ended December 31, 2022 and 2021 was $332,406 and $404,813, respectively.
Video revenue decreased $209,295 (6%) for the year ended December 31, 2023 compared to the year ended December 31, 2022. The decrease was due primarily to a decline in video customers, partially offset by higher average recurring video revenue per video customer, primarily driven by certain rate increases.
Support and other capital expenditures includes costs associated with the replacement or enhancement of non-network assets, such as software systems, vehicles, facilities and office equipment. Business services capital expenditures include primarily equipment, installation, support, and other costs related to our fiber based telecommunications business serving primarily enterprise customers.
Support and other capital expenditures include costs associated with the replacement or enhancement of non-network assets, such as software systems, vehicles, facilities, and office equipment.
Loss on Extinguishment of Debt and Write-off of Deferred Financing Costs Loss on extinguishment of debt and write-off of deferred financing costs amounted to $575 and $51,712 for the years ended December 31, 2022 and 2021, respectively. 56 The following table provides a summary of the loss on extinguishment of debt and the write-off of deferred financing costs recorded by the Company: Years ended December 31, 2022 2021 Repayment of CSC Holdings 5.500% Senior Guaranteed Notes due 2026 $ — $ 51,712 Refinancing of Term Loan B and Incremental Term Loan B-3 575 — $ 575 $ 51,712 Other Income, Net Other income, net amounted to $8,535 and $9,835 for the years ended December 31, 2022 and 2021, respectively.
Gain (Loss) on Extinguishment of Debt and Write-off of Deferred Financing Costs Gain (loss) on extinguishment of debt and write-off of deferred financing costs amounted to $4,393 and $(575) for the years ended December 31, 2023 and 2022, respectively. 58 The following table provides a summary of the loss on extinguishment of debt and the write-off of deferred financing costs recorded by us: Years ended December 31, 2023 2022 Settlement of collateralized debt $ 4,393 $ — Refinancing of CSC Holdings Term Loan B and Incremental Term Loan B-3 — (575) $ 4,393 $ (575) Other Income, Net Other income, net amounted to $4,940 and $8,535 for the years ended December 31, 2023 and 2022, respectively.
Discussions of the results of operations for the year ended December 31, 2020 and comparisons of the 2021 results to the 2020 results can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 as filed on February 16, 2022. 47 Our Business We principally provide broadband communications and video services in the United States and market our services primarily under the Optimum brand.
Discussions of the results of operations for the year ended December 31, 2021 and comparisons of the 2022 results to the 2021 results can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 202 2 as filed on February 22 , 202 3 .
These subsidiaries are subject to the covenants and restrictions of the credit facility and indentures governing the notes issued by CSC Holdings.
The Lightpath silo includes all of its operating subsidiaries which are subject to the covenants and restrictions of the credit facility and indentures governing the notes issued by Lightpath.
Financing Activities Net cash used in financing activities amounted to $335,906 and $1,362,524 for the years ended December 31, 2022 and 2021. In 2022, the Company's financing activities consisted primarily of the repayment of debt of $4,469,727, and principal payments on finance lease obligations of $134,682, partially offset by net proceeds from long-term debt of $4,276,903.
Financing Activities Net cash used in financing activities amounted to $122,591 and $335,906 for the years ended December 31, 2023 and 2022. In 2023, our financing activities consisted primarily of the repayment of debt of $2,688,009, and principal payments on finance lease obligations of $149,297, partially offset by net proceeds from long-term debt of $2,700,000.
News and Advertising Revenue News and advertising revenue for the years ended December 31, 2022 and 2021 was $520,293 and $550,667, respectively. News and advertising revenue is primarily derived from the sale of (i) advertising inventory available on the programming carried on our cable television systems (linear revenue), (ii) digital advertising, (iii) branded content, and (iv) data analytics.
News and advertising revenue is primarily derived from the sale of (i) advertising inventory available on the programming carried on our cable television systems, as well as other systems (linear revenue), (ii) digital advertising, (iii) data analytics, and (iv) affiliation fees for news programming.
See "Risk Factors—Our business, financial condition and results of operations may be adversely affected by the recent COVID-19 pandemic." We derive revenue principally through monthly charges to residential customers of our broadband, video, and telephony services. We also derive revenue from DVR, VOD, pay-per-view, installation and home shopping commissions.
For more information, see "Risk Factors" and "Business-Competition" included herein. We derive revenue principally through monthly charges to residential customers of our broadband, video, telephony and mobile services. We also derive revenue from DVR, VOD, pay-per-view, installation and home shopping commissions.
Contractual Obligations and Off Balance Sheet Commitments Our contractual obligations as of December 31, 2022 consist primarily of our debt obligations, purchase obligations which primarily include contractual commitments with various programming vendors to provide video services to our customers and minimum purchase obligations to purchase goods or services, operating and finance lease obligations, outstanding letters of credit, and guarantees.
In 2022, our financing activities consisted primarily of the repayment of long-term debt of $4,469,727, and principal payments on finance lease obligations of $134,682, partially offset by net proceeds from long-term debt of $4,276,903. 65 Contractual Obligations and Off Balance Sheet Commitments Our contractual obligations as of December 31, 2023 consist primarily of our debt obligations, purchase obligations which primarily include contractual commitments with various programming vendors to provide video services to our customers and minimum purchase obligations to purchase goods or services, operating and finance lease obligations, outstanding letters of credit, and guarantees.
We target a year-end leverage ratio of 4.5x to 5.0x for CSC Holdings over time. We calculate our CSC Holdings net leverage ratio as net debt to L2QA EBITDA (Adjusted EBITDA for the two most recent consecutive fiscal quarters multiplied by 2.0).
We calculate net leverage ratios for our CSC Holdings Restricted Group and Lightpath debt silos as net debt to L2QA EBITDA (Adjusted EBITDA for the two most recent consecutive fiscal quarters multiplied by 2.0).
Costs of operating the plant and the technical facilities, including repairs and maintenance, are expensed as incurred. Costs associated with the initial deployment of new customer premise equipment ("CPE") necessary to provide broadband, video and telephony services are also capitalized. These costs include materials, subcontractor labor, internal labor, and other related costs associated with the connection activities.
Such costs are depreciated over the estimated life of our infrastructure and our headend facilities and related equipment (5 to 25 years). Costs of operating the plant and the technical facilities, including repairs and maintenance, are expensed as incurred. Costs associated with the initial deployment of new customer premise equipment ("CPE") necessary to provide services are also capitalized.
The increase of $65,045 (5%) for the year ended December 31, 2022 as compared to the year ended December 31, 2021 was attributable to the following: Increase primarily due to an increase in interest rates, partially offset by a decrease in average debt balances $ 97,008 Capitalized interest related to FTTH network construction (15,431) Higher interest income (3,259) Other net decreases, primarily lower amortization of deferred financing costs and original issue discounts (13,273) $ 65,045 Loss on Investments, net Loss on investments, net for the years ended December 31, 2022 and 2021 of $659,792 and $88,898 consists primarily of the decrease in the fair value of the Comcast common stock owned by the Company.
The increase of $307,484 (23%) for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was attributable to the following: Increase primarily due to an increase in interest rates, partially offset by a decrease in average debt balances $ 355,762 Other net decreases, primarily lower amortization of deferred financing costs and original issue discounts (43,315) Higher interest income (4,963) $ 307,484 Gain (Loss) on Investments and sale of affiliate interests, net Gain (loss) on investments and sale of affiliate interests, net for the years ended December 31, 2023 and 2022 of $180,237 and $(659,792) consisted primarily of the increase (decrease) in the fair value of the Comcast common stock owned by us through January 24, 2023.
The effects of these losses are partially offset by the gains on the related equity derivative contracts, net described below.
In 2023, the gain was partially offset by a loss on the sale of our Cheddar News business. The effects of these gains (losses) were partially offset by the gains on the related equity derivative contracts, net described below.
Customer installation and network repair and maintenance costs may fluctuate as a result of changes in the level of activities and the utilization of contractors as compared to employees. Also, customer installation costs fluctuate as the portion of our expenses that we are able to capitalize changes.
Customer installation and network repair and maintenance costs may fluctuate as a result of changes in the level of capitalizable activities, maintenance activities and the utilization of contractors as compared to employees. Costs associated with the initial deployment of new customer premise equipment necessary to provide services are capitalized.
(e) Represents the estimated number of single residence homes, apartments and condominium units passed by the FTTH network in areas serviceable without further extending the transmission lines. In addition, it includes commercial establishments that have connected to our FTTH network. (f) Represents number of households/businesses that receive at least one of the Company's fixed-line services on our FTTH network.
In addition, it includes commercial establishments that have connected to our FTTH network. (g) Represents number of households/businesses that receive at least one of our fixed-line services on our FTTH network.
Investing Activities Net cash used in investing activities for the years ended December 31, 2022 and 2021 was $1,921,510 and $1,573,603, respectively. The 2022 investing activities consisted primarily of capital expenditures of $1,914,282. The 2021 investing activities consisted primarily of capital expenditures of $1,231,715 and payments for acquisitions, net of cash acquired of $340,444.
Investing Activities Net cash used in investing activities for the years ended December 31, 2023 and 2022 was $1,706,523 and $1,921,510, respectively, and consisted primarily of capital expenditures of $1,704,811 and $1,914,282, respectively, primarily relating to network infrastructure and customer premise equipment.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following represents the location of the assets and liabilities associated with the Company's equity derivative contracts and interest rate swap contracts within the consolidated balance sheets: Derivatives Not Designated as Hedging Instruments Balance Sheet Location Fair Value at December 31, 2022 Asset Derivatives: Prepaid forward contracts Derivative contracts $ 263,873 Interest rate swap contracts Other assets, long-term 185,622 $ 449,495 As of December 31, 2022, we did not hold and have not issued derivative instruments for trading or speculative purposes.
Biggest changeFor the year ended December 31, 2023, we recorded a gain on interest rate swap contracts of $32,664, and had a fair value at December 31, 2023 of $112,914 recorded as other assets, long-term on the consolidated balance sheet . As of December 31, 2023, we did not hold and have not issued derivative instruments for trading or speculative purposes.
The fair value of these financial instruments is estimated based on reference to quoted market prices for these or comparable securities. Our floating rate borrowings, comprised of our term loans and revolving credit facilities bear interest in reference to current LIBOR-based or SOFR-based market rates and thus their principal values approximate fair value.
The fair value of these financial instruments is estimated based on reference to quoted market prices for these or comparable securities. Our floating rate borrowings, comprised of our term loans and revolving credit facilities, bear interest in reference to current SOFR-based market rates and thus their principal values approximate fair value.
We monitor the financial institutions that are counterparties to our interest rate swap contracts and we only enter into interest rate swap contracts with financial institutions that are rated investment grade. All such contracts are carried at their fair market values on our consolidated balance sheets, with changes in fair values reflected in the consolidated statements of operations.
We monitor the financial institutions that are counterparties to our interest rate swap contracts and we only enter into interest rate swap contracts with financial institutions that are rated investment grade. All such contracts are carried at their fair market values on our consolidated balance sheets, with changes in fair value reflected in the consolidated statements of operations.
Such contracts effectively fix the borrowing rates on floating rate debt to provide an economic hedge against the risk of rising rates and/or effectively convert fixed rate borrowings to variable rates to permit the Company to realize lower interest expense in a declining interest rate environment.
Such contracts effectively fix the borrowing rates on floating rate debt to provide an economic hedge against the risk of rising rates and/or effectively convert fixed rate borrowings to variable rates to permit us to realize lower interest expense in a declining interest rate environment.
See Note 12 to our Consolidated Financial Statements for a summary of interest rate swap contracts outstanding at December 31, 2022. The Company's outstanding interest rate swap contracts are not designated as hedges for accounting purposes. Accordingly, the changes in the fair value of these interest rate swap contracts are recorded through the statements of operations.
See Note 12 to our consolidated financial statements for a summary of interest rate swap contracts outstanding at December 31, 2023. Our outstanding interest rate swap contracts are not designated as hedges for accounting purposes. Accordingly, the changes in the fair value of these interest rate swap contracts are recorded through the statements of operations.
This estimate is based on the assumption of an immediate and parallel shift in interest rates across all maturities. 65 Interest Rate Risk To manage interest rate risk, we have from time to time entered into interest rate swap contracts to adjust the proportion of total debt that is subject to variable and fixed interest rates.
Interest Rate Risk To manage interest rate risk, we have from time to time entered into interest rate swap contracts to adjust the proportion of total debt that is subject to variable and fixed interest rates.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk All dollar amounts, except per share data, included in the following discussion are presented in thousands. Equity Price Risk Our exposure to equity price risk stems from the shares of Comcast common stock we held.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk All dollar amounts, except per share data, included in the following discussion are presented in thousands.
The effect of a hypothetical 100 basis point decrease in interest rates prevailing at December 31, 2022 would increase the estimated fair value of our fixed rate debt by $541,058 to $13,085,812.
The effect of a hypothetical 100 basis point decrease in interest rates prevailing at December 31, 2023 would increase the estimated fair value of our fixed rate debt by $537,079 to $13,428,892. This estimate is based on the assumption of an immediate and parallel shift in interest rates across all maturities.
Fair Value of Debt At December 31, 2022, the fair value of our fixed rate debt, comprised of our collateralized debt, senior guaranteed and senior secured notes, senior notes and notes payable of $12,544,754 was lower than its carrying value of $17,279,643 by $4,734,889.
Fair Value of Debt 67 At December 31, 2023, the fair value of our fixed rate debt, comprised of senior guaranteed and senior secured notes, senior notes, notes payable and supply chain financing of $12,891,813 was lower than its carrying value of $16,588,923 by $3,697,110.
Removed
We had entered into equity derivative contracts consisting of a collateralized loan and an equity collar to hedge our equity price risk and to monetize the value of these securities.
Removed
These contracts were expected to offset declines in the fair value of these securities below the hedge price per share while allowing us to retain upside appreciation from the hedge price per share to the relevant cap price.
Removed
In January 2023, we settled the collateralized indebtedness by delivering the Comcast shares we held and the related equity derivative contracts resulting in the receipt of cash of approximately $50,500. The underlying stock and the equity collars were carried at fair value in our consolidated balance sheets and the collateralized indebtedness is carried at its principal value, net of discounts.
Removed
These discounts were being amortized over the term of the related indebtedness. The carrying value of our collateralized indebtedness amounted to $1,746,281 at December 31, 2022. As of December 31, 2022, the fair value and the carrying value of our holdings of Comcast common stock aggregated $1,502,145.
Removed
Assuming a 10% change in price, the potential change in the fair value of these investments would be approximately $150,215.
Removed
As of December 31, 2022, the net fair value and the carrying value of the equity collar component of the equity derivative contracts entered into to partially hedge the equity price risk of our holdings of Comcast common stock aggregated $263,873, a net asset position.
Removed
For the year ended December 31, 2022, we recorded a net gain of $425,815 related to our outstanding equity derivative contracts and recorded an unrealized loss of $659,792 related to the Comcast common stock that we held.
Removed
Fair Value of Equity Derivative Contracts Fair value as of December 31, 2021, net liability position $ (161,942) Change in fair value, net 425,815 Fair value as of December 31, 2022, net asset position $ 263,873 The maturity, number of shares deliverable at the relevant maturity, hedge price per share, and the lowest and highest cap prices received for the Comcast common stock monetized via an equity derivative prepaid forward contract are summarized in the following table: # of Shares Deliverable Maturity Hedge Price per Share (a) Cap Price (b) 42,955,236 2023 $40.95 $49.55 (a) Represents the price below which we are provided with downside protection and above which we retain upside appreciation.
Removed
Also represents the price used in determining the cash proceeds payable to us at inception of the contracts. (b) Represents the price up to which we receive the benefit of stock price appreciation.
Removed
For the year ended December 31, 2022, the Company recorded a gain on interest rate swap contracts of $271,788 .

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